How to set up automatic payments on your business credit card

Quick insights

• Setting up automatic payments on your business credit card can help you avoid late fees and missed payments.
• Most card issuers allow you to set your payment amount anywhere from the minimum payment to the full amount each month.
• If you set up an automatic payment, you can likely cancel it or change the amount at any time through your online account.

Business owners juggle many things. Managing expenses, payments and invoices is often time-consuming. If you're a business owner looking to streamline expenses and payments, you might want to consider setting up automatic payments for your business credit card. In this article, we'll explore the benefits and considerations of automatic payments and how to set them up.

What is the benefit of setting up automatic payments for a business credit card?

One of the biggest benefits of setting up automatic payments is avoiding late fees and missed payments. You may have the best of intentions to pay your business credit card in full and on time every month, but life can get in the way. If you're tied up with your personal life, say you're traveling or sick, you don't have to remember to make your payment if you have set up an automatic one.

This credit card feature allows you to make your payments even if you forget. And that can be a very good thing considering the outcomes. Missed or late payments can result in:

• Late fees
• Accrued interest
• Higher interest rates, especially if you've missed multiple payments

Not to mention, if you're more than 30 days late making a payment, your card issuer may report this to the credit card bureaus and that may affect your credit score.

How do I set up automatic payments for my business credit card?

Your card may have different ways to set up an automatic payment. Most cards will allow you to set up automatic payments online. You also might be able to via the card issuers app or by calling the card's customer service number. With some card issuers, like Chase, you also may be able to visit a local branch.

In many cases, you can choose the amount you pay automatically. Most cards offer several automatic payment options. The most common automatic payments are:

• Minimum amount: Pay only the minimum amount on your card every month
• Full balance: Pay the full balance every month
• Specific monthly amount: Set the amount you want to pay. It does not need to be tied to the minimum payment amount or full balance.

You also may have the option to choose the recurring date that your payment is made each month.

Considerations for setting up automatic payments

Taking a set-it-and-forget-it approach to credit card payments has its perks, but you may want to consider a few of the pitfalls as well.

One risk to setting up automatic payments is overdrafting your account. You will avoid late fees but it's not helpful if you're getting hit with an overdraft fee. You will want to ensure you have enough to cover whatever automatic payment amount you've set. Setting up an automatic payment might not be a good option if the amount of available funds in your business checking account varies widely from month to month.

Setting up an automatic payment may mean you're not checking your account or transactions as frequently. If so, you might not spot potential fraud and errors as quickly. You likely will still want to review your account on a regular basis even if you've set up automatic payments.

Confirming the date you set for automatic payment will help ensure it is made on time. You may want to give yourself a few days' buffer to account for weekends or banking holidays.

If you're concerned that setting up automatic payments will be more trouble than it's worth, consider payment reminders. Many card issuers allow you to set up reminders to pay. They can often be via email or text alerts.

Can I cancel or change a recurring automatic payment?

When you set up a recurring payment, it is not set in stone. You can make changes, and many card issuers try to make this an easy process. It is typically as simple as logging into your online account and making a few edits to what you've already set up.

You may also be able to cancel your automatic payments at any time through your online account. As always, you also can call the customer service hotline on your card to edit or troubleshoot your automatic payments.

Which expenses for my business could I automate each month? 

If you are setting up automatic payments, it might be helpful if you have an idea how much goes on your card each month. Some businesses have monthly recurring expenses for goods and services, and those standing charges may be a way to help plan the expenses going on your credit card.

Certain expenses will be the same amount each month. Typical automated business expenses include:

• Internet
• Phone
• Bookkeeping software
• Payment and invoicing software

If you put those expenses on a card, you'll have a baseline fixed monthly amount to pay.

In summary

Managing expenses is one of the many tasks required of business owners. If you're looking for a way to streamline this process, you may want to consider setting up automatic credit card payments. Determine how much you want to pay—the full amount, minimum amount or somewhere in between —and pay your credit card bill without having to manually log in and do it every month.