Yeah, it's a nightmare if things go wrong – it's not that easy to straighten them out. I also agree that it's not good for varying amounts, or if you're not the kind to keep a close eye on your account (unless the company sends you reminders just before they take the payment out).

Definitely try setting aside money every month! That's what I try to do. One day I'd like to be able to be a whole year ahead and pay upfront, annually. On my Visa, of course, for the rewards

@ Anonymous 2 – Your EFT horror story is enough to keep me away from messing with it. I think I will take you up on your fourth option and start saving for my next policy renewal.

I signed up for a two year gym membership (I know, big mistake…), but that's not the problem.

After the two years was up, they continued to charge me.

Obviously, I was not a happy camper. I went to the gym, who said they could do nothing because they outsourced their billing.

So I called up the billing company, and got a copy of my contract. After the two years was up, they had automatically signed me up for another THIRTY years.

At this point, I did have the option to cancel, but only after providing more than 30 days notice, which meant that I had to pay another month's bill before I could cancel.

I would definitely avoid EFTs (except for student loans like you mentioned).

When you give any company automatic access to account, you take away your first line of defense – reviewing your bill. It's a lot easier to argue about a bill before you pay it than it is to try to get a refund.

Can I suggest a fourth option – put away money each month, to difuse the impact of the six-months-at-a-time bill?