I’m checking my bill, and checking it twice, to find out if I have been charged once or twice – to be sung to the Santa Claus Is Coming to Town tune.
During this time of year, many credit card companies are offering enticements for customers to open credit cards. Most credit card companies have “insurance” policies or offer a free first month service for debt and / or fraud monitoring. The semi-related companies are hoping that you forget to cancel the initial “free” service.
For example, upon initial review, I thought the unemployment insurance on a credit card or medical insurance was appealing. I opted into the extra services at a minimal charge of $3 each per month. It did not seem like a lot to pay at the time. Much to my chagrin I discovered too late that the unemployment insurance payment on the credit card bill only took affect after a 30- to 90-day wait period. My Texas / federal unemployment checks took longer to process and I used any cash on hand to pay mortgage and vehicle payments. Even my medical insurance had a time clause.
I quickly fell behind on the credit card bills even though I had the insurance. I know, I had insurance on every card and learned this lesson the hard way. My lack of due diligence resulted in my paying interest on the original balance, the insurance charge and the interest accrued upon that.
I have since learned to check all my bills and I still prefer getting my bill by mail; although, this review can still be done on the electronic version of the bill. I do violate most recommendations and still pay bills on-line whenever I can. However, I do examine each bill prior to payment. I look for the initial “free” services, any potential add on offers that I did not request. Many times, I find them on basic service bills.
For example, with one satellite provider, I discovered a downloaded movie for 2 a.m. on a Saturday. I work two jobs during the holiday and I was still at the retail job – working. I know my dogs and cats didn’t order the movie (with an actor I don’t like). After three minutes of arguing, the service representative removed the charge from my bill.
I do not recommend signing up for auto pay. This piece of advice goes against what most financial experts will tell you do. Auto pay does not give the customer an opportunity to review the bill and the charges. I have had several experiences with this process and found that it cost me money – not saved me money. My local, and only, phone company offered me a $5 discount a month for bundling my services and enrolling in auto payments. I calculated a$60 yearly savings. However, after the first two bills, I noticed the phone charges had increased. I discovered long-distance charges that were not mine and they had added a “service”, which I did not request. The service had nothing to do with the phone or satellite service. The only auto pays I allow on my checking account are my mortgage payments and my home/auto insurance charges.
I also monitor my own payments for late fees. Late fees, along with bank overdraft protection fees can add up over time. For example, my overdraft fees average $32 PER overdraft. While I have the overdraft protection on two of my bank cards, I don’t have it on the third. I use my electronic calendar on my desktop to set my alerts for payments to ensure I don’t incur late fees (too often). When you are working two jobs, sometimes you are still juggling finances. The electric company charges $5 to $9 for late payments, as does the water company.
Both employers pay me twice a month; I have opted for direct deposit. Depending on the bank, most direct deposits are sent electronically to your bank by midnight of the “advice” or pay date. My bank takes into account my paychecks before paying any bills. Hence, if I have a check pending for deposit, and a check pending for payment, the bank will acknowledge the pending deposit first and I avoid overdraft fees.
I have also discovered that most companies will allow you to change your payment date, at least once, within a one-year period. I changed my truck payment when I changed jobs and I went from a monthly salary to a twice-a-month salary. I was also allowed up to three payment deferrals on the truck during a time span that I was applying for unemployment – again, this will depend on your bank. Changing payment dates to complement your payment dates can save late fees and overdraft fees.