For as long as I can remember, wireless phone companies have offered sizable discounts to customers who agree to sign up for automatic bill payments—typically $5 to $10 a month per line. Autopay arrangements are convenient and can lower the risk of late fees, but companies also push autopay because it discourages customers from switching to another service—what the industry calls “stickiness.”

But within the last few years, the three largest wireless services have begun to push their customers to pay via automatic electronic checks or debit cards, rather than credit cards. In 2020, Verizon limited its autopay discount to debit cards, bank account withdrawals, and its co-branded Visa credit card. T-Mobile changed its autopay policy in July of this year; it no longer provides a discount for payments made via credit card. And earlier this month, AT&T reduced its autopay discount for credit card payments from $10 a line to $5 a line.

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“This does not surprise me at all, simply because everyone is trying to reduce the cost of doing business,” said Philip Bond, a professor of finance and business economics at the University of Washington’s Foster School of Business.

Encouraging customers to switch from credit to debit card payments reduces the wireless companies’ costs to process payments. Credit card transaction fees are significantly higher than those for processing debit card or bank-transfer payments.

Every time you buy something with a credit or debit card, the merchant has to pay an “interchange fee” (also called a “swipe fee”) to the bank that issued the card to process that transaction.

The swipe fee for credit cards is between 1.5 and 3.5 percent of the purchase price, according to The average swipe fee for a debit card payment is about .03 percent of the sale, according to the Federal Reserve. Bank transfers also cost significantly less than credit card swipe fees.

“It all comes down to money,” said Bill Hardekopf, CEO of “They’re going to save tons of money by doing this.”

What’s the smart move?

Credit cards are the safest way to pay bills. If there’s a billing problem, you can dispute the charge and the credit card company must investigate. You don’t get the same consumer protections with debit cards or electronic check payments.

That’s why I resist most offers for payment by electronic check. Hardekopf is also not a fan of bank transfers.

“I just don’t like the idea of people having direct access to my bank account,” Hardekopf told Checkbook. “The fewer people who have my checking account routing number and checking account number, the better.”

Teresa Murray, director of the Consumer Watchdog office at PIRG, doesn’t have a problem paying with a debit card or electronic check. She did the math and decided the savings on her wireless bill ($25 a month) was worth the risk.

But Murray does something most people don’t: She has a separate checking account—one with a small balance—just for electronic check, debit card, PayPal, and Venmo transactions.

“I would never, ever, ever give a company permission to dip into my bank account where I get my direct deposits, and that I pay my mortgage and my credit card bills out of,” Murray said. “I wouldn’t do it, and I wouldn't expose that account to the whims of some company, or I wouldn’t expose it to a fraudster.”

Murray pointed to T-Mobile’s massive data breaches—37 million accounts this year and 53 million accounts in 2021—as one reason she would not use a debit card or authorize an electronic payment linked to her primary checking account.

Discouraging Credit Card Payments

Some gas stations offer discounts for cash or debit card payments. Many restaurants now add a two-to-three-percent fee to cover the cost of accepting credit cards.

It’s logical to assume that more businesses will consider ways to encourage debit card or cash transactions—or make customers pay the cost of using their credit cards.

It will be interesting to see if there’s a pushback, especially from shoppers who earn credit card rewards or who use credit cards to buy things they can’t pay for on the spot.


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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and You can also find him on Facebook, Twitter, and at