Ie Recurring Authorisation Payments: When To Stay Away

Credit card authorisation payments are perhaps one of the best services that credit card companies give. It free you from having to worry about different endless bills by allowing you to consolidate all your bills into just one bill - your credit card bill. Instead of having to transact with several companies, keep track of different due dates, and go out of your way to line up at different offices, all you now need to do is take care of your credit card bill on time. With the great convenience that comes with this service, who wouldn’t want to take advantage of recurring authorisation payments?

The truth is that even with such benefits, recurring authorisation payments is not advisable for everyone. Some of the instances when you should think twice about staying away from recurring authorisation payments include:

1. If you are in credit card debt or are already making minimum payments - In this case, you don’t even have to think twice. If you already have recurring authorisation payments set up, you should actually phone your service provider and cancel the service. The reason for this is that you will end up deeper in debt as your credit card balance balloons. Pay your bills in cash to avoid late fees, over the limit charges, and steep interest rates. Of course, you should also do something to get out of debt.

2. If you have too many bills for your credit limit - Check how much your bills add up each month to see if you have sufficient credit limit to cover all these bills. If you don’t, just set up recurring payments for the bills that you keep missing due dates the most. You have to make sure that you also pay off your entire credit card balance each month to ensure that you do not go over your credit limit.

3. If you have problems disciplining yourself in keeping your expenses down - If you plan on enrolling services like phone bills and other such bills that are not fixed, you have to make sure that you have your phone usage under control. Otherwise, you might not realise that your phone bill has ballooned overtime since the bill being directly charged to the credit card. You might start wondering why credit card bill is ballooning a bit too late and end up taking a financial hit for it.

4. If your service provider has a reputation for poor customer service - This can lead to much frustration if they end up double charging you. You will have to go through the hassle of processing refunds while waiting for your credit limit to free up again. The worse thing about this is that credit cards can do nothing about this, except expedite processing the refunds on their part, since it is the service provider’s fault.

By: Alex Foreman

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Alex Foreman is a freelance article writer who writes for Financial Facts about the current financial news and the credit crunch.