Automatic bill pay is perfect for planning your monthly budget and making sure your payments are always on time. Unfortunately, a recent study suggests that the “out of sight, out of mind” effects of automatically paid power bills can up your energy consumption and up your bill.
The study, led by Professor Steve Sexton at Duke University and published in The Review of Economics and Statistics, looked over the records of nearly 160,000 power company customers to see what kind of affect automatic bill payments had on them. On average, those who used automatic bill pay consumed 8% more electricity, with their bills showing a 4-6% increase compared to standard billing.
Sexton suggests that removing the step of engagement standard billing may make customers completely unaware of how much power they’re using and what they’re paying. While the increase might not seem like much, it’s important to keep an eye on automatic bill payments of all types. Keep an eye on your power bills and usage even if you use autopay, and set up automatic payments with smart caveats to keep things in check just in case.
Automatic Bill Payment and Salience Effects: Evidence from Electricity Consumption | The Review of Economics and Statistics via Mental Floss
Photo by Brendan Wood.