Manage subscription costs
Because of inflation, many Americans are looking for ways to reduce their regular expenditures. Unfortunately, many individuals are paying for subscriptions they no longer need — and, in some cases, they’re paying too much for those they do need.
Many, myself included, initially subscribe to a publication or to a streaming or cable TV service because it is offered free or at a discount for a limited time. Then the regular subscription rate kicks in, and you’re stuck paying a high rate for a product that might not be worth it.
I have been guilty of this myself. There are publications that I enjoy reading yet whose regular monthly rates exceed their value to me. When the publication offers a much lower rate for three months, for example, sometimes I don’t keep track of the end date of the “discounted rate,” and I continue to receive the publication at the higher rate because of the automatic renewal. Only when I review my credit card bill do I realize I have failed to cancel the subscription when I planned to. Sometimes, when there have been delivery problems and the subscription has been extended because of that, it is easy to lose track of when a subscription at discounted rates ended.
My advice is simple: When you start a discounted subscription, make an entry on your calendar of the date you want to cancel a subscription. Many publishers tell you that you can cancel a subscription at any time, but there are unexpected caveats. For example, I recently tried to cancel a subscription that was automatically extended. Although I was told I could cancel at any time, I discovered I would be charged for a complete month because I failed to cancel before the new non-discounted rate ended.
A pet peeve of mine is that when a subscription ends, you automatically are renewed at a rate that is frequently much higher than the rate a new subscriber would be charged. If that happens, you should contact the publisher and ask for the new customer rate. In this situation, I have always been able to renew at the rate advertised for new subscribers.
I recently reviewed a study conducted by C+R Research that analyzed recurring monthly charges for a cross section of individuals. It found that although first estimates of monthly costs were $86, actual costs were $219 a month because they had not monitored their costs. The difference added up to approximately $1,600 a year.
Seventy-four percent of the study group said they had forgotten about many monthly recurring subscription charges. Forty-two percent realized that many of the recurring costs were for publications they were no longer using. Thirty percent of the subscriptions that were forgotten were for internet services; 22% for TV/ movie streaming; 16% for Amazon Prime.
Auto-pay is convenient, but if you find that many of your monthly recurring payments are unnecessary, you should limit auto-pay to services you know you want continued on a long-term basis.
One way to monitor your costs is through the use of a tracking service. The most popular tracking services found in the C+R study were Mint (30%), TrueBill (10%) and Chase (9%).
Mint is a popular tracking service that is available at no cost using an app. Contact support@livemint.com to establish an account. Mint is easily established, and you can use it to track spending, create budgets and obtain an overview of all your finances. You can link all your financial accounts, set up notifications and alerts, and obtain free credit scores. You can’t use Mint as a joint account, but multiple family members can establish separate accounts. The service is free to subscribers because Mint receives its income from advertisers on the site.
Bottom line: If you establish good controls — either on your own or through tracking services — you can likely save hundreds or even thousands of dollars a year by limiting or optimizing your usage of subscriptions.