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- Verizon and AT&T are offering discounts for paying bills with your bank account instead of a credit card.
- They want to avoid credit card processing fees, which have been on the rise lately.
- But your credit card rewards and cell phone protections may be worth more than the monthly savings.
If you have an account with Verizon or AT&T, you may have received notices about an update to their autopay discount policies. Now, you need to pay with your bank account/debit card instead of your credit card (unless it's the Verizon card, with Verizon) to maintain the full monthly autopay discount of up to $10.
Why? Credit card transactions cost businesses more than debit card payments. Credit card issuers use those extra fees to fund credit card perks such as rewards and discounts.
Given the discounts being offered and the ease of using a debit card, should you go ahead and link your debit card/bank account to optimize your savings?
Here are a few things to consider before you make the move:
1. Do you trust your cell carrier?
The main difference between linking a debit card and a credit card is account protection. Once you link your bank account with your carrier, or any business for that matter, it has direct access to your account and your cash. This opens the door to the possibility of data breaches, overpayments, and other mistakes that can lose you money and threaten your identity.
If there is an issue with your credit card, you can flag the problem to your issuer, and it will typically credit the amount back to your account while it investigates the matter. If there is an issue with your bank account, however, you will have to wait until the bank completes its investigation to get your money back. So do you trust your carrier to get it right every month?
2. Are there any credit card benefits that you might miss out on?
Some credit cards offer cell phone protection as a benefit. I have used that protection myself when I dropped my phone once and shattered the screen. My credit card protection program paid for me to get another one, but I was only eligible because I had been paying my cell phone bill with that card every month.
3. Do you have a rewards or cash-back credit card?
Do you have a rewards credit card, such as one that earns cash back, miles, rewards, points or other bonuses? If so, your rewards and benefits could be worth more than the monthly savings of linking your bank account. Check our points and miles valuations to determine what your rewards are worth, and do the math to see if it makes sense for you.