Businesses love it when you sign up for automatic payment. You can’t forget to send them their money, although you do have to make sure you have enough money in your account. I absolutely hate it, which is why with the exception of my car loan (which I received an interest rate reduction in exchange for signing up for automatic payments) I have ZERO automatic payments extracted from my bank account.
Automatic payments, or subscription auto renewals, are also a way that businesses get you to pay for services that you may not want any or need anymore simply because you forget to cancel them. I had to relearn this lesson the hard way recently.
A few months ago, my son asked if he could try out a gamer network. It costs $6.95 per month to be a part of the network. He gave me $7 for a month’s subscription, and I set up an account, and entered in the information for the fee to be paid for out of my PayPal account. After a few weeks he told me the network wasn’t what he expected and that I could cancel the account.
Who has two thumbs and forgot to cancel the service? Yeah, that would be this guy.
I was reconciling the checkbook recently when I saw a $6.95 charge from PayPal. Looking into the charge more carefully I figured out what it was for, slapped my forehead and cancelled the service. I looked at my history and found that I had paid for a total of three extra months of the service after my son had indicated that I could cancel it. Thinking back, I remembered seeing the charges in past months too, but chalked it up to other games he was buying and giving me money for. I shook my head, and thought to myself that this is another reason why it would be great for my son to have his own debit card, and be responsible for his own payments for games.
I prefer to make my payments manually. Mortgage payments, utility payments, garbage payments and countless others can all be setup to be automatically deducted from your checking account. But I like to be the one that initiates the transaction. It helps me pay more attention to when bills are due, and how much they are. When my bill payments are on autopilot, my brain tends to go on autopilot.
This is a great illustration of the result of how that works out for me.
Do you automate your finances? How does it work out for you? Have you ever paid for services you didn’t want anymore because the subscription auto-renewed?
Brought to you courtesy of Brock