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Autopay via CC or Checking Account
Old 09-10-2011, 01:46 PM   #1
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Autopay via CC or Checking Account

I use Shopsafe numbers for auto payments. The problem is that these expire in only a year, and when you get the notice that the number has expired, it's too late to extend it's expiration date.

The point is, that it is a big bother to generate new numbers every year. An alternative is to make the autopayment from the checking account.

One disadvantage is that you lose the 1% savings in CC rewards. Is it also true that the checking account is not as well protected from fraud as is the credit card account?
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Old 09-10-2011, 02:18 PM   #2
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Don't really know the answer to your checking account question tho I'm under
the impression that most credit unions, at least, would not hold you liable for fraudulent transactions.....tho proving that might be another issue.

Can't you use the intermediate solution of using the actual credit card number for autobilling? You still have to update them when you get a new expiration date I think but that's usually a few yrs at least. I do that if the vendor accepts cc; use checking as last resort.
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Old 09-10-2011, 02:25 PM   #3
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I'm very reluctant to allow anyone access to direct debiting my checking account - too few safeguards plus a bad experience a few years back getting an auto-pay stopped.

I have a cc which I use exclusively for auto-billing. Since I use that credit card only for this purpose, I don't worry with a Shopsafe number, I simply look at the account online a couple of times each month to be sure only the handful of bills that should be charged to the card actually show up. And in the event there is a problem, I know I can report it and be made whole. Not necessarily the case for the checking account route.
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Old 09-10-2011, 02:29 PM   #4
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You still have to update them when you get a new expiration date I think but that's usually a few yrs at least. I do that if the vendor accepts cc; use checking as last resort.
Most of my ongoing monthly bills are a debit to my CC, and I receive notification of an upcoming exparation date about a month in advance as a reminder to update my CC billing info for items such as my cell phone, DISH TV, and mail perscription providers.

I use checking direct debit for those vendors (example - electric and water bills) where a CC is not accepted or a charge is levied and have been doing so for many years without a concern.

The only checks I actually write are for homeowner taxes (which I deliver to the local tax office, so I still don't use the mail)...
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Old 09-10-2011, 02:36 PM   #5
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Most of my ongoing monthly bills are a debit to my CC, and I receive notification of an upcoming CC exparation date about a month in advance as a reminder ...

I use checking direct debit for those vendors (example - electric and water bills) where a CC is not accepted or a charge is levied and have been doing so for many years without a concern.
This is pretty much my situation, too. Never had a problem with any of my direct payment accounts, either with a CC or a checking account, and I've been doing this for well over ten years.
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Old 09-10-2011, 03:53 PM   #6
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I have had esssentially all of my regular bills automatically deducted from my checking account since the last century, with no problems whatsoever, ever. What's even better, I have not had a late payment on anything ever since that time. I check the deduction and compare with the paper bill every month, at my leisure, but that is probably unnecessary since I have never found an error.

When turning off a regular payment, I simply took care of it as recommended. I contacted my bank and the business receiving the regular payment well in advance, and complied with procedures outlined by both. This meant that, for example, when I paid off my mortgage I formally turned off the automatic payments at BOTH ends - - at Chase mortage AND at my bank, filling out and submitting forms at both ends in a timely fashion. I think they wanted about 10 weeks' notice, or at least more than I expected, but it all worked out just fine.
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Old 09-10-2011, 04:17 PM   #7
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Can't you use the intermediate solution of using the actual credit card number for autobilling?
We had the bad experience of our CC number being stolen, probably via an online merchant, and it was discovered while we were on a trip. That was a big hassle, and we want to avoid anything like that, so we avoid using our "real" CC number whenever possible.

Your solution's good, REW, but if you have 10 autopay accounts, and the number gets stolen, you have to set all 10 accounts to a new CC number.

Shopsafe is good, but has some bad interface issues, and the stupid 1-year expiration limit. If the card expires at the end of September, you can't extend the expiration date even at the beginning of September. Also, there's a bug such that when you try to do this, it tells you to "enter an expiration that is later than the current expiration." You have no idea why it isn't working.

And as long as I'm venting, I see no reason that for credit cards the expiration date is part of the validation process for a card number. Why can't merchants just get the number, so we can renew our cards without having to renew all the account numbers? If the card is expired, then any transactions should fail.
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Old 09-10-2011, 04:44 PM   #8
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And as long as I'm venting, I see no reason that for credit cards the expiration date is part of the validation process for a card number. Why can't merchants just get the number, so we can renew our cards without having to renew all the account numbers?
Maybe they can. The last time the CC I use on line expired, I got a new card with the same number -- just a new expiration date. When I updated my Amazon account for the new card, I didn't need to change the card number -- just the expiration date (and, IIRC, the special secret 3 digit add on number).
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Old 09-10-2011, 04:52 PM   #9
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We had the bad experience of our CC number being stolen, probably via an online merchant, and it was discovered while we were on a trip. That was a big hassle, and we want to avoid anything like that, so we avoid using our "real" CC number whenever possible.

Your solution's good, REW, but if you have 10 autopay accounts, and the number gets stolen, you have to set all 10 accounts to a new CC number.

Shopsafe is good, but has some bad interface issues, and the stupid 1-year expiration limit. If the card expires at the end of September, you can't extend the expiration date even at the beginning of September. Also, there's a bug such that when you try to do this, it tells you to "enter an expiration that is later than the current expiration." You have no idea why it isn't working.

And as long as I'm venting, I see no reason that for credit cards the expiration date is part of the validation process for a card number. Why can't merchants just get the number, so we can renew our cards without having to renew all the account numbers? If the card is expired, then any transactions should fail.
We had a similar experience with the CC number being stolen and all the hassle entailed after that since it took penfed a whole week to get another card to us I switched all the autopays to a back-up CC and now use that card for all autopays, never using it for any other type of purchase. I just couldn't resist the desire to have a 1% discount.

If I have another such failure then I'll switch to bank autopay.

I agree with you on the hassle of date expirations and since we now go on very extended vacations (months at a time) I may have to switch to bank auto-pay as a new card may be issued and mailed to my home address while I am away.
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Old 09-10-2011, 05:08 PM   #10
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We had the bad experience of our CC number being stolen, probably via an online merchant, and it was discovered while we were on a trip. That was a big hassle, and we want to avoid anything like that, so we avoid using our "real" CC number whenever possible.
We had a credit card compromised the day before a big vacation. We did not even know until the CC company called us. They cancelled the card and sent new ones via overnight courier to the address I gave them (not our home address).

We had quite a few auto charges going to the card. Surprisingly, when the auto-charge was denied to these places, they simply sent a letter that said in effect, "Your CC has denied the charge, please fix within 2 weeks or we will do something about it." I suspect this happens all the time as they seemed to have ready form letters for this situation.

Anyways, this is a reason to have more than one card. It turned out our other 'backup' card had expired 3 months earlier and my spouse put the replacement cards somewhere (i.e. she lost them), so they were never activated. That company also overnighted us new cards.

Anyways, this is a reason to have more than two cards. It turned out ....
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Old 09-10-2011, 05:10 PM   #11
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I go the CC route first (cash back bonuses ), then checking account autopay.

Did have my CC number stolen once, but I don't think that was from an autopay.

I believe bank debit cards are not as protected as credit cards, but do know that if you spot something fishy, you can go to the bank and fill out an affidavit and have those charges taken off.
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Old 09-10-2011, 07:19 PM   #12
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Anyways, this is a reason to have more than one card.
Will the bank (our Mastercard is through BofA), give you another card if you ask for one, or do you have to go through another bank?
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Old 09-10-2011, 07:31 PM   #13
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Will the bank (our Mastercard is through BofA), give you another card if you ask for one, or do you have to go through another bank?
Banks usually offer more than one card. As an example, we have both a Visa and a Mastercard through USAA Bank.
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Old 09-10-2011, 07:54 PM   #14
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Will the bank (our Mastercard is through BofA), give you another card if you ask for one, or do you have to go through another bank?
I have two BofA cards. They are both backups to other cards. Also have two Citi cards; the BofA cards are not necessarily backups to Citi.

If you have ever seen credit card processing from the inside out (and I have) you would see that the difference in the the level of exposure to fraud between online merchants and brick and mortar merchants is almost non-existent. The greatest exposure is at third-party "processors" through which every credit card transaction must pass.

Regarding the expiration date, I believe that is just one more thing the cardholder might know that a thief might not know -- another level of security -- even though it seems trivial. The place where we buy gasoline (with yet a different card from those listed above) requires us to enter our zipcode, again, something known to us but probably not to someone who has stolen the card.
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Old 09-10-2011, 08:28 PM   #15
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Personally, I rather have my cc compromised than a checking account #, but I also have a total of 3 ccs, 1 primary, 1 business, 1 backup.

I found cc to be friendlier in fraud situations - new number, new card, shipped overnight, no fees within a day or 2. Whereas if your checking acct was compromised, not sure they can get you up and running that fast, i.e new acct #, checks, associated fees... YMMV
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Old 09-10-2011, 08:34 PM   #16
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Will the bank (our Mastercard is through BofA), give you another card if you ask for one, or do you have to go through another bank?
It sounds like you are asking for total confusion. I would avoid that.

Otherwise, think about what happens when you call them up. Or you pay a bill. I would always be second guessing which card I used or had assigned an auto-pay to. Right now, I have no problems because I don't think "MasterCard", I think CapitalOne, CitiCard, Chase, WF, USAA, etc.
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Old 09-10-2011, 08:59 PM   #17
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It sounds like you are asking for total confusion. I would avoid that.

Otherwise, think about what happens when you call them up. Or you pay a bill. I would always be second guessing which card I used or had assigned an auto-pay to. Right now, I have no problems because I don't think "MasterCard", I think CapitalOne, CitiCard, Chase, WF, USAA, etc.
Huh?

Each and every transaction is attached to one - and only one - account number. I have never had any confusion at any institution where I have had multiple accounts. Gosh, we have three accounts at the credit union, two at ING, and two at HSBC, and ten at the brokerage. Nobody has ever mixed anything up.

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Right now, I have no problems because I don't think "MasterCard", I think CapitalOne, CitiCard, Chase, WF, USAA, etc.
If that is what it takes to make it work for you, then, fine.


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Old 09-10-2011, 09:42 PM   #18
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For me auto pay on a credit card is always preferable over direct debit from a bank account. Both enjoy similar protection under the Electronic Funds Transfer Act, but when there is an unauthorized charge, the two are handled much differently. The credit card is subject to additional regulation, and when you dispute a the charge it is automatically reclassified to a pending investigation status. It is then incumbent upon the credit card company to ensure the charge is legitimate. On the other hand, when a charge is made against a bank account the funds are withdrawn and it is incumbent on the account holder to demonstrate that they should be returned. Until that happens to the bank’s satisfaction the funds are not considered yours.

The difference between the two is the burden of proof when there is a dispute. I dislike direct debit for that reason, and debit cards as well. Add a credit card rebate, and (for me) the choice is clearly the credit card.

I don’t use any generated CC number options because the liability for unauthorized CC charges is the issuer, not mine.
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Old 09-11-2011, 12:28 AM   #19
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For me auto pay on a credit card is always preferable over direct debit from a bank account. Both enjoy similar protection under the Electronic Funds Transfer Act, but when there is an unauthorized charge, the two are handled much differently. The credit card is subject to additional regulation, and when you dispute a the charge it is automatically reclassified to a pending investigation status. It is then incumbent upon the credit card company to ensure the charge is legitimate. On the other hand, when a charge is made against a bank account the funds are withdrawn and it is incumbent on the account holder to demonstrate that they should be returned. Until that happens to the bank’s satisfaction the funds are not considered yours.

The difference between the two is the burden of proof when there is a dispute. I dislike direct debit for that reason, and debit cards as well. Add a credit card rebate, and (for me) the choice is clearly the credit card.

I don’t use any generated CC number options because the liability for unauthorized CC charges is the issuer, not mine.
Another issue w/ checking accounts is that if you generally run a lean account, a bad charge could reduce the balance so that subsequent legitimate charges bounce and generate numerous penalties. I've only had that happen once due to an error by a fund company who only had authorization to deposit monthly dividends into the account. For some reason they decided to do a withdrawal of a large amount for an autoinvest
program (never requested) instead of a deposit. The withdrawal bounced as did several other legitimate charges. However both the guilty party and the bank reversed the penalties promptly when notified. I suppose the same problem could happen w/ a credit card if you were near the credit limit.
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Old 09-11-2011, 02:18 AM   #20
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Personally, I rather have my cc compromised than a checking account #, but I also have a total of 3 ccs, 1 primary, 1 business, 1 backup.

I found cc to be friendlier in fraud situations - new number, new card, shipped overnight, no fees within a day or 2. Whereas if your checking acct was compromised, not sure they can get you up and running that fast, i.e new acct #, checks, associated fees... YMMV
I can't see that your checking account can be compromised using auto-pay options as you don't use a debit card to set up auto pay.

You give out your bank account details every time you write a check but a thief can't buy anything with those details. A thief would have a short career if he used someone else's bank account details to set up auto pay for his utilities bills.

I actually know the bank account details of many folks in the UK as this is the easiest and now extremely common way to send money to friends, pay bills etc. All you can do with bank account details is to put money in.
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