Remember the old days when you’d get a bill in the mail, fill out the remittance form, enclose it along with your check in the envelope, put a stamp on it and drop it into the mail? Wow. That’s a lot of steps! Thanks to technology like Manilla, you can now pay all your bills and manage household accounts online with a single login.
Another way to streamline your financial processes is by setting up credit card autopays or automatic bank account drafts. As much as this kind of automation simplifies things, the convenience of automating payments doesn’t come without drawbacks.
Here are seven ways you could be leaking money every month without even realizing it.
1. Rate Reversals
Beware the company that negotiates their rates down in the middle of a term. Just because the phone representative says she’ll lower your monthly fee and it goes down the next month, doesn’t mean it will stay down. Sometimes it will stick for just a few months, then “accidentally” revert back to your previous rate.
2. Gym Memberships
I swear, sometimes it’s easier to get divorced from a Kardashian than to break up with a gym or health club. Canceling gym memberships can be tricky because they often pass the buck up the line and claim they can’t help you at the local level. If you thought you canceled your gym membership months ago, you might be right, but it never hurts to be cautious and keep your eyes open for continuous monthly debits against your account.
3. Credit Monitoring Services
Sometimes when you purchase a product using a finance company, it comes bundled with extra “perks” such as a membership to a buying club or a year of credit monitoring services. Be on alert for mystery charges like these on your credit card statement.
4. Software Subscriptions
Remember five years ago when you signed up for that online backup service, cloud-based contact management software, or some other technology solution you never really used? They may be auto-renewing each year without you noticing. This is why it’s a good idea to review your statements every month instead of just once in a while.
5. Uncanceled Utilities
When you moved, you did your part and called the phone, gas and electric companies to cancel your accounts. Most times, municipal utilities have their act together and cancel your account and auto-payment promptly. Don’t assume, though. It’s always smart to watch your statements for several months after your move.
6. Accidental Double Charges
Even reputable companies can experience computer glitches. In 2012 and 2013, our bank double-debited our mortgage payment on multiple occasions. Although we called and raised holy heck about it, it kept happening. Finally, we escalated the issue and got it stopped permanently, but you better believe we check our online bank account several times a month now just to be sure an extra $1,400 isn’t missing again.
7. Free-To-Fee Conversions
When you’re checking out on a web store, there’s often an inconspicuous little checkbox pre-selected at the bottom of the page. If you don’t notice and uncheck it, you may unknowingly activate a “Free Trial Membership” of some service you don’t need. The stinker is that once your free trial is up, unless you cancel, your free trial converts to a paid subscription. Now you’re paying each month for something you didn’t even know you had. Be aware when purchasing online and read the fine print so you don’t accidentally opt into something without realizing it.
BONUS: Criminal “Test Balloon”
Once someone gets your credit card number, they try to charge a series of very small amounts, to gauge whether you and your credit card company are on the ball. Typically, these test charges are under $20. If the charges go through, it’s an indicator to the criminal that the card is good and they may hit you hard the next time. My credit card company recently alerted me to two suspicious charges and stopped them before they went through. I still had to cancel my card and have a new one issued. So if you see a small charge you don’t recognize, first call the vendor phone number on your statement to verify what it is. If it’s not a charge you initiated, call your card issuer immediately and alert the fraud department.
The lesson here about automation is “trust, but verify.” It’s tempting to “set it and forget it” using automated payments, but to be safe, review your bank and credit card statements, not just every quarter, but every single month. These money saving tips can save you a boatload of money and potentially alert you to an identity thief before they do anything serious.
Monica Ricci founded Catalyst Organizing Solutions in 1998 and has been helping people change their lives ever since.
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