Autopay Your Cellphone Bill With a Credit Card? Your Discount May Disappear

When you have a bill you're on the hook for every month, setting it up to get paid automatically can be a smart choice. For one thing, it's a huge time saver. But also, it can help you avoid a situation where you pay late due to sheer forgetfulness.

Being late with certain bills has the potential to damage your credit score. And even if that doesn't happen, you don't want to get hit with pesky late fees. So it's a good idea to take advantage of autopay options when they're made available to you.

Cellphone companies generally let you set up your account to autopay. And you may be in line for a discount if you go this route. But be careful -- if you use a credit card to autopay your cellphone, you might lose out on that break.

When using a credit card doesn't pay

It's easy to see why you'd be inclined to use a credit card to autopay your cellphone bill. Many credit cards offer rewards or cash back on purchases like that, so if you're paying a bill, you might as well get a little something extra out of it.

But a growing number of cellphone service providers have been requiring customers to switch to a debit card or bank account to get an autopay discount. And if yours has adopted that rule, you may want to follow it. Chances are, the discount you're being offered is greater than the amount of cash back you'll get from your credit card.

Verizon has actually required autopay customers to use a bank account or debit card for years to get a discount. But recently, AT&T and T-Mobile have followed its lead.

This shift makes sense. Like all merchants, cellphone companies pay processing fees when they accept credit cards, and those eat into their profits. So those companies are no doubt implementing this change to conserve costs, kind of like how restaurants have taken to tacking on a surcharge for customers who use a credit card to pay for a meal.

But if you're in the habit of autopaying your cellphone bill with a credit card, you may want to make a change. Or, more specifically, you should read through the terms of your provider's autopay agreement and see if using a credit card means you don't get to enjoy a discount. If so, a switch to a bank account or debit card could be smart.

Other ways to save on your cellphone bill

Even though you may not be able to snag a discount by autopaying your cellphone bill with a credit card, the opportunity to get that discount still exists. And that's good, seeing as how cellular service is one of those expenses most of us can't do without.

There are also other steps you may be able to take to lower your cellphone costs. One option to consider is forgoing a cellphone upgrade the next time you're eligible. Often, upgrading will mean locking yourself into an extended payment plan that results in higher monthly bills. If your current cellphone is working just fine at the time you're eligible for an upgrade, don't rush to take it.

It also pays to see if you're eligible for a discount based on being a student or a current or former member of the U.S. military. Cellphone providers commonly offer special rates to people in these categories.

Finally, talk to your spouse, parents, or siblings about getting onto a family plan and splitting the cost. It could be cheaper than each of you having your own plan.

It's unfortunate that a number of cellphone companies will no longer give you a discount for autopaying your bill with a credit card. But hey, at least that discount is still on the table. That's something to be grateful for.