3 Ways To Handle Mystery Subscriptions and Save a Bundle
A survey found 58% of Americans admit there’s at least one charge on their monthly credit or debit card statement they don’t recognize. While putting recurring purchases on credit/debit cards takes the hassle out of paying monthly bills, these charges can add up over time and cost you even more money — especially when it comes to services you no longer use:
Nowadays, automatic recurring payments are a great tool to help people never miss paying the bills on time. From streaming services, to music, to premium shopping memberships, many Americans are choosing to set it and forget it — that is, until the credit card bill comes in. While it may surprise some consumers how fast these charges pile up, what’s even more shocking is that a majority of Americans don’t know what some of these charges are for.
I’m a big fan of automating bill payments by placing them on a credit card — I don’t use a debit card in case a large, unexpected billing error occurs and overdrafts my checking account. You don’t have to remember when the bill is due and eliminate the risk of making a late payment and incurring late fees. As an added bonus, you only have to remember to pay one bill a month — the credit card in which all of your other monthly bills are charging to.
If you don’t recognize a recurring charge on your credit card, it’s time to take a look at all the recurring charges on your credit card. Subscription costs don’t sound like much (it’s only $3.99 a month!), but they start adding up.
A lot of people cut the cord and got rid of cable — then added Amazon Prime, Netflix, Hulu, Paramount, Apple TV+, Showtime, HBO, ESPN, and YouTube TV, not realizing all of these subscriptions in total now exceed what they were paying for cable, which of course defeats the purpose of cutting the cord.
Here are some tips for dealing with subscriptions and using credit cards to pay other bills:
- If you haven’t used a subscription service in the last 90 days — cancel it — even if it’s a small amount. Paying for a service or product you no longer use is a waste of money, plain and simple.
- Use two credit cards for monthly subscriptions/bills. One of these credit cards should be due on the 10th of the month and the other on the 25th — you can call each credit card company and ask them to change the due date to these days. Add up all of your monthly subscriptions/utility bills and divide by two. For example, let’s say the total is $500, so divide by 2 and you get $250. The goal is to place $250 on the credit card that is due on the 10th and the other $250 on the card that is due on the 25th. This ‘smooths’ your monthly bills so you don’t have to pay them all out of the same paycheck (e.g., 1st or 15th of the month). You can do the same with auto and mortgage payments. Let’s say both are due on the 5th of the month, leaving you a little squeezed for cash on your first paycheck of the month. If you want to move your car payment to the 15th, pay it on the 1st as you usually do, then pay it again on the 15th when you get your next paycheck. You will then be one month ahead and can pay it on the 15th going forward. You have effectively changed the due date for your car payment!
- I advise against using an auto-draft out of your checking account to pay a bill. Mistakes happen and you don’t want your checking account funds tied up while the situation gets sorted out. Also, never use your debit card anywhere except at ATMs to get cash. It’s a huge hassle if a thief gets a hold of your debit card and uses it.
There are only two ways to improve your financial situation — increase your income or decrease your expenses. Unused subscriptions are low-hanging fruit. They are easy to find and easy to cut.