DALLAS — Grab a pen and paper so I can give you my bank account number and the routing number. I’ll also furnish my debit card number, because what could possibly go wrong? That is how I feel when a business specifies that if I am on an auto-payment plan or if I am getting an autopay discount, I have to use my bank account or debit card instead of a credit card.
One legit business I pay monthly even wanted me to give them the login credentials for my bank account for autopay! That is definitely not happening, so I still send them a paper check each month to keep from having to do that.
Not to pick on T-Mobile, but it has been making one headline after another recently for the announcement that customers who get the auto pay discount will have to pay through their bank account or debit card, no credit cards or digital wallets accepted if you want the discount.
That could be a bummer to some consumers, because some credit cards offer free phone repair protection if you pay your cell bill through them. Also, you can rack up points or cashback by paying bills each month with a credit card.
Plus there’s this: Even the Federal Trade Commission comes right out and says, “Consumer protections for credit cards are stronger than protections for debit cards”.
Paying with a checking account instead of a credit card
I have had to dispute credit card charges before. And the issuer of that card took the charge away until they investigated the circumstances. With a checking account, though, if a vendor takes out the wrong amount, I can go through the possibly time-consuming process of getting that remedied. But in the meantime, they are holding onto my money that I don’t think they should have. So that is a problem.
And then there are the data breaches. A lot of companies have had them, and if you have paid attention to headlines like this one and this one, you know those breaches have also affected T-Mobile, even if the breaches didn't expose payment information.
It makes me really uncomfortable if a company has my credit card info on file and their system gets hacked. I really hate it though if that happens and they have my bank account information stored in their compromised system.
So, there is a workaround I use for one of my bills where I get a discount for paying through auto draft. I’m not telling anyone to do this. Your bank may not even have a way to do this – but you can check.
I set up a sub-account within my checking account, almost like you would do with a linked savings account or your child’s checking account. My sub account has its own account number and its own routing number. I gave those to the company that required a bank account for an auto-pay discount.
Then, in that account, I deposited a little bit more than the amount of the monthly bill that I am trying to pay. And each month I transfer the money to cover that bill from my main bank account to the sub account. It is annoying, but it takes a minute per month…and I do not have to give someone else the information to my primary bank account.