Automatic payments certainly simplify your financial life. You can reduce the risk of late payments and fees, and some lenders even give you a discount for enrolling in autopay.
However, the convenience of automatic payments does have a downside: You could end up paying for services you no longer use without realizing it. In fact, a study from Self Financial found that people spend nearly $400 per year on unused subscriptions.
So, if you have several recurring payments that you’re ready to put an end to, how can you stop automatic payments from your bank account?
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With automatic payments, you authorize a company (such as an internet provider, student loan servicer, or gym) to take money directly from your checking account on a set date each month. For example, your utility company may automatically deduct $100 from your account on the 15th of every month to pay your bill.
There are several benefits to enrolling in automatic payments:
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Avoid late fees: Missing a bill or loan payment often results in hefty late fees. By setting up automatic payments, you eliminate the risk of forgetting to make a payment and incurring unnecessary fees.
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Improve payment history: Since your history of making on-time payments toward loans, credit cards, and other bills determines a large percentage of your credit score, enrolling in autopay allows you to establish and improve your credit.
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Possible savings: Some lenders give borrowers an interest rate discount for signing up for automatic payments, typically 0.25% to 0.50%. Over the life of your loan, you could save hundreds of dollars thanks to that discount.
Despite the benefits of autopay, there may be times when you need to pause or cancel automatic payments. For example:
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You decide to cancel a service: Whether you’re dissatisfied with a subscription or simply looking to cut expenses and save money, you may decide to cancel a service or membership. For example, if you’re not using a certain streaming service, you could save anywhere from $10 to $25 per month by canceling that subscription.
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You closed your bank account: If you switched banks, you’ll need to end automatic payments from the original bank account and enroll in autopay with your new account details.
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You switched payment methods: Sometimes, using your bank account for automatic payments may not make sense. For instance, if your credit card has a valuable rewards program, using your card may be a better choice. Plus, some credit cards offer statement credits for certain types of subscriptions, such as streaming platforms or rideshare memberships, so using your credit card rather than your bank account can be a smart idea. If you need to switch payment methods, you’ll need to stop autopay from your bank account and update your account with your credit card details.
Read more: How to close a bank account: A step-by-step guide
Whatever your reason is for stopping automatic payments from your bank account, you can pause or end autopay with one of the following options:
1. Log into your account and update your payment information
The simplest way to end your automatic payments is to log into your service provider account. Once you’ve signed in, visit the billing section and turn off automatic payments or update your payment details.
If you aren’t able to cancel automatic payments online or you’re worried it didn’t work, call the service provider’s customer service line. Explain that you’d like to stop automatic payments and ask for an emailed or written confirmation that autopay was turned off.
For added peace of mind, contact your bank or credit union and notify them that you revoked your consent for automatic payments. They may have a form you need to complete, but you can use this sample letter from the Consumer Financial Protection Bureau to get started.
Be sure to update your payment details to avoid missing a payment and incurring late fees. It’s a good idea to review your bank and credit card statements to ensure the company followed your instructions.
If you requested that an automatic payment be stopped but you’re still being charged, you may need to escalate the issue. You can file a complaint with the Federal Trade Commission and your state attorney general.
No, closing a bank account doesn’t end automatic payments. The service provider will continue to deduct funds from the account; if the account is closed, that means the payments won’t go through, and missed payments will be reported to the major credit bureaus. Plus, you’ll likely incur late fees. To properly end automatic payments, you must contact the service provider directly.
Read more: Does closing a bank account hurt your credit score?
A stop payment order is different from simply canceling an automatic payment. It is a formal request to a financial institution to cancel a payment or check before it’s drawn on the account. This action can make sense if you’re the victim of a scam or unauthorized transaction and want to cancel the payment before the other party can receive it.
Read more: 7 common banking scams and how to avoid them
If you cancel an automatic payment — and don’t set up new autopay details — you’re at risk of missing future payments. As a result, you could see your credit score decrease. And, if you qualified for a discount thanks to autopay, you’ll lose that interest rate deduction.
If you’re trying to get a handle on your subscriptions and memberships and want to trim your spending, bill negotiation apps can be appealing. These services review your bank and credit card statements on your behalf and identify recurring payments. In many cases, these services can also cancel recurring payments for you, if requested.
These apps can be convenient ways to save money, but there is a catch: Depending on the platform, the service can take 40% to 50% of the amount saved as payment.
