Living with credit, Protecting yourself

Recurring charges wreak havoc on my finances

Kelly Dilworth

I recently learned something embarrassing: Over the past few years, I’ve wasted more than $100 a month on subscriptions and services I don’t even use.

For example, after reviewing my credit card statements, I found that Amazon has been charging me $1.49 a month for a short story app I don’t remember signing up for and another $1.69 a month for a magazine I haven’t read in years.

I’m also subscribed to several other monthly services that I keep forgetting to use. Weight Watchers has been charging me $19.95 a month since last summer, but it’s been months since I’ve regularly logged on to the dieting app and tracked what I was eating.

Similarly, I signed up my family for a membership to the YMCA last fall, but we didn’t start going to the gym until January. If we had waited to sign up, we could have saved hundreds of dollars in charges.

Canceling recurring charges takes willpower

I know – in theory – that cutting off subscriptions I rarely use would save me a ton of money, but following through on that resolution has been challenging.

For months, I’ve been meaning to ask my husband if we should cancel one of the video streaming services we rarely watch, but I keep forgetting to mention it. If we’d canceled the streaming service last year, we could have saved nearly $100.

Similarly, we also could have saved a good chunk of change if I had ended a $10-a-month cosmetics subscription I knew early on was a poor fit. Instead, I procrastinated and took months to get around to canceling the service.

According to an August 2017 CreditCards.com survey, subscription services are easy to sign up for but hard to quit.

The survey polled more than 1,000 U.S. consumers and found that up to 35 percent of respondents had signed up for a subscription service without realizing their credit cards would be repeatedly charged. Many did nothing about it, even after they had learned how much they were paying.

Many of the subscription services I’ve canceled have been relatively easy to cancel. For example, it took me just a few minutes to log into my Amazon account and cancel the digital subscriptions.

Yet many people – myself included – are under the impression that canceling these charges will be a huge, time-consuming pain, so we routinely put it off.

With subscriptions, mindfulness is key

When I was a kid, my mom used to warn me about signing up for services that debit your checking account or charge your cards. Now, in an age of streaming services and other popular subscriptions, recurring charges are hard to avoid.

My husband and I have subscribed to so many services over the years. If we had realized how much all these different services were costing us, we might have been more aggressive about trimming the ones we weren’t using.

Many popular subscription services cost less than $10 a month, which seems relatively affordable. But if you add up all the recurring charges piling up on your cards, you may be surprised by how much they’re eating into your budget.

Personal finance experts suggest you itemize all your subscriptions so you can get a handle on how much you’re spending.

Itemizing your subscription services can be a pain if you try to do it manually, but a number of personal finance apps will search your credit card statements and list recurring charges.

I tried this with the Trim app and found it to be surprisingly easy to see all my recurring charges in one place. It made me realize just how much I was undermining my budget without realizing it.

One of the problems with recurring charges is that you are less mindful about your spending. That monthly charge can go on and on. It isn’t the same as if you wrote a check each month or manually entered your card details to continue a service. As a result, these monthly services may feel less costly, too.

I know that’s been true for me. I’m not ready to give up all my automatic payments since they do make life less complicated, but I do want to be more mindful of subscriptions I sign up for.

If I don’t use a service or an app for a few months, I will stop paying for it. If I continue paying, I am just wasting money.

See related: Take control of pesky recurring charges, 6 free tools to stop recurring charges

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