How does the Google automatic payment work?

With automatic payments, you're only charged for the actual account, you're not billed in advance. In other words, you will be charged, when you have received a clicks through your campaign. Google bills you after 30 days or when your account costs reach your billing threshold, whichever comes first.

How do billing thresholds work?

When you create and activate your Google AdWords account, your initial billing threshold is set at US$50. The billing threshold is raised incrementally each time that your account spend hits the threshold before 30 days have ended. The initial billing threshold of US$50 is first raised to US$200, then to US$350, and then to the final amount of US$500. The amount billed may be slightly in excess of the threshold if the account accrues costs very quickly.

See the next slide for an example of billing thresholds

Note: A one-time activation fee ($5) applies when you create and activate your Google AdWords account.

Example of Billing Thresholds

Let's say that advertiser Alan opens an AdWords account and starts accruing costs on Oct. 1:

• On October 5, Alan reaches his initial billing threshold of US$50. At that time, Google charges him for the amount accrued (which might be in slight excess of the billing threshold if he accrued costs quickly). Alan's billing threshold is increased to US$200. A new billing cycle begins.
• On October 25, Alan reaches his new billing threshold of US$200, triggering Google to charge him for costs accrued. Google again raises his billing threshold to US$350, and initiates a new billing cycle.
• On November 18, Alan accrues more than US$350 in charges. Google bills him and raises his billing threshold to US$500.
• Alan's next bill will be processed on December 18 or when he exceeds the final US$500 billing threshold -- whichever comes first.
• Source: Google.com/AdWords