I have written before about how I was financially illiterate as a young man, and how my foolish choices cost me dearly. I got divorced, ended up completely broke, and had to move back home with my mother at the age of 31. It was a humbling time. What was worse was that losing my job and apartment was dealing with the financial decoupling bureaucracy of deactivating automatic payment plans. I lost my apartment and some bills related to that apartment were still being deducted from my checking account. It had never occurred to me to think about how to stop automatic payment from checking account options.
The most practical thing to do after losing work is to cancel all automatic payments. Money is tight in such situations and the average bank overdraft fee is $34.
That $34 overdraft fee can be applied multiple times for multiple automatic payments.
Anyway, for some reason, an internet service provider was still charging me for a service I didn’t use or want. I contacted them and they stopped the payment.
The internet provider company pulled the same crap the next month. I had to call my bank and spend 15 minutes on the phone to get the automatic payment plan canceled.
Automatic bill payments are convenient, but they can also be a pain if you are not vigilant.
Here are three ways you can stop automatic payment from a checking account – it can really cost you if you are not paying attention.
Make a Stop Payment Request
The simplest way that you should be able to stop automatic payment from a checking account is to make a stop payment request.
You must make a stop payment request as soon as possible. It puts a stop to a payment that has been recently authorized but before it is irrevocably processed.
You can make a stop payment request of the vendor or business awaiting the transaction’s processing and waiting to get paid.
Unfortunately, a vendor or business can legally ignore, refuse, or stall your stop payment request.
Your best bet is to make a stop payment request directly through your bank before processing the automatic payment transaction.
The processing times for a transaction differ between banks and vendors and is not an industry-wide uniform process. You may have hours or a day or two to make a stop payment request. Usually, you will only have 3 business days after the transaction to make a stop payment request. Only an authorized bank account holder can make a stop payment request.
Remember: a stop payment request becomes a moot and non-viable procedure once an automatic payment has been processed.
Call your bank to make a stop payment request. That is probably the fastest way to get the stop payment process started.
Some banks may require verbal confirmation of the stop payment request. Others may require that you fill out forms, applications, or provide written confirmation of the request.
You could also log into an online bank account and initiate the process that way as well.
A stop payment request is not free, and such a fee varies from bank to bank. Depending on where you bank, a stop payment request fee can cost anywhere between $15 to as much as $35.
Troubleshoot How to Stop Automatic Payment From Checking Account
Human beings are usually the architects of their own suffering. And, expensive self-actuated annoyances.
Sometimes to stop automatic payment from a checking account, you must backtrack recent transactions to see if you unwittingly caused the problem.
Have you ever signed up for a “free trial,” offer, or service like a gym membership? Usually, you must submit financial information to qualify for the free offer. Then that financial data is used to initiate automatic renewal payments after a free trial period. Your ability to opt-out of automatic renewal payment is usually vague or involves a lot of runarounds.
Over 60 million Americans were members of a gym in 2017. Gyms usually offer more membership spots than they can accommodate to keep business traffic high.
And to benefit from the procrastination of members. Up to 80% of people who sign up for a gym membership show up once or never show up.
Meanwhile, the average gym membership is $60 a month.
So, how do gyms make money? Most gym memberships have automatic renewal clauses built-in. They count on procrastinating members to not cancel payments.
Or, they count on unwitting members to not find out about the automatic payments for months.
Check your online bank account to make sure you have not unwittingly enabled automatic payment renewal functions.
Also, check to make sure you are not automatically paying for a service you don’t need or want anymore.
For example, find invoices, bills, and statements for:
- Student loan
- Insurance
- Student loan
- Car payment
- Cable bill
- Credit card statement
- Streaming service
- Food delivery service
Make sure you cancel an automatic payment as soon as possible. It may not be possible after 72 hours.
Vigilantly Monitor Your Accounts
The best way to stop automatic payment from a checking account may be to stop it before it occurs.
Get into the habit of checking your online checking accounts regularly, like weekly or bi-weekly. This way, you can alert the bank as early as possible if you find an unauthorized automatic payment.
Under federal law, a bank must cancel automatic payments before processing after ample warning or it may be liable to reimburse you.
No One Will Care About Your Personal Finance More Than You
Don’t apply for products or services that are offered in free trial promotions unless you actually want them.
Such promotions usually require bank account or credit card information to initiate the free trial period. Companies will later deceptively begin automatic payments from bank accounts.
Keep a budget if you opt into automatic bill payments withdrawn from your bank account. Check into your finances weekly or bi-weekly to make sure unauthorized payments aren’t initiated.
Stay on top of your finances so you will never be surprised by unauthorized automatic electronic payments.
Read More
MAKE $63K AS A COMPUTER PROGRAMMER WITH THESE FREE ONLINE CLASSES
CARES ACT RENT EVICTION PROTECTIONS EXPIRING SOON – HOW TO COPE
STRATEGIC TAX BREAKS FOR HOME BUYERS AND HOMEOWNERS
WHY DOES PAYING OFF A LOAN PAYMENT HURT CREDIT?
BEAR MARKET NAVIGATION TIPS IN THE COVID-19 ERA
Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.