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Wednesday, December 2, 2009

Easy to Pay, Even Easier To Forget.(Business/Financial Desk)(BASIC INSTINCTS).

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FOR more than a year I've been paying $4.95 a month for access to product reviews on the Consumer Reports Web site. I'm not an appliance junkie. I just happened to sign up when my husband and I were looking for a washer-dryer, and told myself: It's only $4.95 a month; I'll cancel as soon as we figure out what to buy.

Although we put that purchase off, I was reluctant to cancel and give up all those handy product ratings. What if we needed a blender? Switching to the annual subscriber rate of $26 would have saved money, but my own inertia worked against me. Soon the monthly fee blended into all the other charges on my credit card statement, and I forgot it was there. And kept paying it.

While that may make me one of the dumber consumers in the jungle, I suspect many other people are spending more on these sorts of stealth expenses than they realize. Not only are consumers juggling many bills each month, more people are switching to automatic payment methods to handle the multiplicity of recurring expenses.

According to a 2005 study by the American Bankers Association and Dove Consulting, 52 percent of consumers used an automatic payment from a credit or debit card or bank account to pay at least one bill -- up from 40 percent in 2004.

Michael Herd, a spokesman for Nacha, the electronic payments association, notes that convenience is a big factor. ''When you think that people have Internet service now, wireless service, cable TV or satellite service, it stands to reason that folks have more recurring bills than they had 10 years ago or so,'' he said, ''and if you have 20 bills to pay instead of 10, it makes life easier to automate those.''

As a huge fan of online bill payments, I have to agree with Mr. Herd. It's much easier to click ''Send'' than write a check. But I'm uneasy about the temptation to have more payments automatically billed to my credit card or deducted from my checking account. It's not just the easy access to my account information -- or my cash -- that makes me nervous. It's the sneaky way these charges can build up, like fog on a windshield, and make it hard to see where all your money is going.

Consider how many little services consumers are signing up for these days, on top of their usual monthly expenses. In addition to basics like insurance premiums and utilities, now people are willing to pay what seems like an innocuous amount -- $4.95, $9.95, $12.95, $19.95 a month -- for TiVo, text messaging, satellite radio, NetFlix, online services like Match.com and Audible.com and countless other essentials of modern life.

Every mobile communication device seems to hold the promise of death by a thousand subscription fees. In addition to ring tones and text messaging and e-mail, for just a few dollars a month, you can subscribe to MSpot or mFlix, two services that deliver full-length movies to your cellphone, for example. Why wait until you're in your own living room, sitting in front of a decent-size screen, when you can squint at your cell?

But I digress. The point isn't the quality of the services, but how seductive these monthly subscriptions can be. Brice Gaillard, a contributing editor to House Beautiful, was dismayed when she changed cellphone services and her mobile e-mail charges rose to $19.99 a month, from $2.99, in addition to a 50-cent fee for each text message, a service that was free on her old phone.

''I resent that the way I use my phone hasn't changed but the expense has multiplied,'' Ms. Gaillard said. ''My bill is much higher,'' she added, but she pays it.

Given how enticing the ''pay only one small fee per month'' method seems to be, a shrewd consumer needs to keep a sharp eye on what he's paying for each month -- then multiply by 12 to decide if he wants to be paying that much each year for services he may not use or, like me, forget about entirely.

About 14 months and $69.30 down the drain, I finally did cancel my subscription to Consumer Reports. I timed myself and it took a minute and 47 seconds. I'm glad I got rid of it, because now I'm thinking of subscribing to the online music-selection service Pandora (www.pandora.com), which is even cheaper -- only $3 a month for a year. And I'll use it all the time. I'm sure.

Source Citation
Dunleavey, M.P. "Easy to Pay, Even Easier To Forget." New York Times 25 Feb. 2006: C6(L). Academic OneFile. Web. 2 Dec. 2009. .


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