You could be losing hundreds of dollars to unused subscriptions every year - By Meghan Collie - National Online Journalist, Smart Living & Entertainment Global News
It’s becoming increasingly popular for businesses to adopt a subscription model, offering customers access to convenient services — like TV streaming — for a small recurring fee.
And most Canadians are buying. According to Payments Canada, roughly 90 per cent of Canadians used electronic fund transfers (EFT) to pay for at least one routine expense per month in 2017.
Such transactions are mostly “electronic remittances to pay billers,” but consumers are also using EFT to pay for recurring bills, and these automated charges can quickly add up.
A single-digit charge at the beginning of each month may not seem like a big deal. In fact, it may even go unnoticed. But by the end of the year, you could have wasted hundreds of dollars on relatively unused services — a phenomenon known as “subscription creep.”
“You should always do a regular checkup on your finances… That means going through your credit card statements and seeing, line by line, where your money’s going,” said personal finance expert Barry Choi.
“Quite often, people just pay off the bill and they don’t go through, line by line, to see what their expenses are,” he told Global News.
Signing up for free trial periods can also result in unwanted charges.
“That’s obviously a great marketing tactic from all these businesses. That’s how you get their emails and that’s how they convince you to buy something you may not have normally bought,” said Jessica Moorhouse, a financial counsellor and host of the Mo’ Money podcast.
“Sadly, what most people do is they sign up for it, they completely forget that they do it and [then] they don’t use it. They get charged for a month and they may even forget for several months.”
Here is some expert advice on how to curb “subscription creep.”
Take a hard look at your spending over the past few months
“It sounds really annoying and boring… but [you need to] look in the past to see where your money has gone,” said Moorhouse.
The best way to see all of your monthly charges is to sit down with your credit card statement.
If you have online banking, download the Excel spreadsheet version of your statements. This will allow you to comb through even the smallest expenditures, line by line.
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