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Using recurring payments

Credit, Credit & debt, Credit cards, Loans, Money

Smiling young woman lying on her living room sofa shopping online with a credit card and laptop

Do you ever wish there were more hours in the day? Most of us are busy with work, household chores, and family obligations. Keeping up with all your responsibilities can take a lot of time.

By setting up recurring bill payments, you can streamline your finances and free up more time in your busy life. Recurring payments, also called automatic payments, may even help you improve your credit score.

Here’s what we cover:

Key takeaways

  • Recurring payments allow you to transfer money from your bank account or credit card to pay bills automatically when they’re due. Also called automatic payments, they are a great tool to use for your predictable bills—loan payments, credit card bills, rent, utilities, and more.
  • There are many benefits to setting up recurring payments. They can reduce the time you spend paying bills and simplify your finances. They use less paper. And they’re a safe, secure way to keep up with your regular expenses.
  • You can set up recurring payments in two ways: directly with your creditor, or through your bank. Both methods are easy, fast, and secure.

What are recurring payments?

Recurring payments (sometimes called automatic payments) are a tool you can use to pay your bills on a specific schedule. These payments are automatically sent to your creditor on the date you choose. They are a great way to stay current with your bills.

You can set up recurring payments for fixed expenses (those that are the same amount each month) and for variable expenses (those that are a different amount each month).

Some examples of fixed expenses are:

  • Loan payments
  • Rent or mortgage payments
  • Subscription services
  • Gym memberships

Variable expenses may include:

  • Credit card bills
  • Utilities
  • Phone bills

Most vendors, creditors, and banks offer recurring bill pay services. You can choose which bills you want to automate and which you prefer to pay manually.

How do recurring payments work?

Recurring payments are processed electronically, and they can be set up online. You can use your credit card, debit card, or bank account as the payment method.

Once your recurring payments are set up, your bills will automatically be paid on time each month. You can decide which days the transfers take place and how often they are made. You also have the option to discontinue recurring payments if you prefer to go back to paying your bills manually.

What are the benefits of recurring payments?

Here are some reasons you might want to set up recurring payments for your predictable bills.


Paying bills manually can be time consuming because you have to:

  • Collect your bills
  • Write checks
  • Enter the information in your checkbook
  • Mail your payments

Recurring payments make your life easier by simplifying this process. As long as you have enough money in your account to cover your bills, you’ll enjoy more peace of mind, avoid late fees, and have more time to focus on other things.


If you’re concerned about the security of online payments, there’s good news. Recurring payments are protected by digital encryption. Encryption is the process of transforming your digital data into a secret code that no one else can understand.

Checks sent through the mail can be lost, stolen, or delayed. With recurring payments, you can relax knowing your financial information is safe and your payments will be made on time.

Improved credit score

Making payments on time is one of the most important things you can do to earn a higher credit score.

What is a credit score?

Your credit score is a number between 300 and 850 that gives businesses an idea of how likely you are to make payments on time. Having a high credit score can make it easier to get approved for new credit cards and loans. It may also make you eligible for lower interest rates.

To improve your credit score, start by making sure all your bills are paid on time each month. Recurring payments can help you do that, as long as there is enough money in your bank account to cover the payments.

Less paper

Paying your bills by mail requires envelopes, checks, and stamps. The cost of these items adds up over time.

Paying your bills electronically uses less paper. It’s kinder to the environment and also saves you money on postage.

How do I set up recurring payments?

Ready to take advantage of the benefits of recurring payments? There are two ways to set up the process, either directly with your creditor or through your bank.

Recurring payments made directly to a creditor

Each business has its own process for setting up recurring payments, but usually it follows these steps:

  1. Create and log in to your online account with your creditor
  2. Go to the payment section in your account and look for recurring (or automatic) bill pay services
  3. Enter your bank account or credit card information to set up recurring payments
  4. Decide which day you want your payment to be made—we recommend scheduling your payments a few days before the due date so your payment will have plenty of time to process

Once you complete these steps, your creditor will be authorized to take out your payment according to the schedule you have set up. Because these payments are made through the creditor, this option works well for both fixed and variable expenses.

Recurring payments made through your bank

The process for setting up recurring payments through your bank is similar.

  1. Create and log in to your online banking account
  2. Go to the section for bill payment
  3. Enter the creditor’s name and payment address, payment amount, and the date that you’d like the transfer to take place
  4. Repeat for each creditor that you want to pay automatically

After you submit this information, your bank will transfer your payments automatically on the dates you have chosen. Because recurring payments made through your bank are for set amounts, this option works best for fixed expenses.

How do I know if my payment has gone through?

Once you’ve set up recurring payments, you’ll want to make sure that your payments are being processed correctly. Your vendor, creditor, or bank will usually send you a confirmation email to let you know that each payment has been received.

Some companies may also email you a reminder letting you know that your payment will be processed soon. This gives you time to check your bank account and make sure you have enough money to cover the transfer.

If you don’t get a confirmation email, you can look at your bank statement or credit card statement to see if the payment went through. If you have questions, contact your bank or creditor right away.

When should I avoid recurring payments?

You’ll always want to keep enough money in your bank account to cover any payments you make, both recurring and manual.

However, you may want to avoid recurring payments in the following situations:

Your monthly income varies

If you earn the same amount every month, recurring payments can be a great tool.

But if your monthly income goes up or down depending on how much you work, your bank account may not always have enough money to cover recurring payments. If you spend more than you have in your account, you risk being charged overdraft fees. In this situation, it’s better to pay your bills manually so you can be sure there’s enough money in your account to cover the payments.

You’re unemployed

If you don’t have an income, recurring payments could drain your bank account before you’ve had a chance to deposit more money. You may want to wait until you have a steady income before setting up recurring payments.

Oportun: Affordable loans with recurring payments

Recurring payments can save you time and make your life easier. If you want to take out an affordable loan with a lender that offers recurring payments, look no further than Oportun.

A loan through Oportun offers personalized payment schedules, fixed interest rates, and affordable loan payments. Even if you have a limited credit history or no credit history at all, we’re happy to look at your application. If you’re approved, we’ll get you your money fast with direct deposit.



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The information in this site, including any third-party content and opinions, is for educational purposes only and should not be relied upon as legal, tax, or financial advice or to indicate the availability or suitability of any Oportun product or service to your unique circumstances. Contact your independent financial advisor for advice on your personal situation.

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