Bills Americans Overpay for Simply Because They Don't Ask To Pay Less
Americans spend hours clipping coupons or chasing cash-back rewards, yet overlook one of the easiest ways to save money: asking questions and negotiating before paying. Whether it's your monthly internet bill, your insurance premium or even a major purchase, many prices aren't as fixed as they seem.
Financial experts say a few simple questions can unlock savings.
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Recurring Bills Draining Your Budget
Many of the biggest overpayments are recurring bills that increase slowly over time. Christopher Stroup, a certified financial planner (CFP) and owner of Silicon Beach Financial, pointed to insurance premiums, internet service, cell phone plans, medical bills and investment or banking fees as "the biggest offenders."
He said that many consumers accept annual price increases without comparison shopping.
“Spending thirty minutes reviewing these expenses each year can produce meaningful savings with very little effort," he said.
Families ought to shift out of "routine" mode, according to Paul Mauro, founder of Smart Financial Lifestyle and work on negotiating down costs.
Bills That Seem Fixed, But Aren't
Many consumers assume prices are fixed, but companies frequently have retention discounts, promotional pricing and loyalty offers waiting for consumers to just ask.
“A simple phone call can reduce recurring monthly expenses without sacrificing the quality of service," Stroup said.
Industries most poised to offer these deals include healthcare, home improvement, telecommunications, insurance and financial services, he said. “A polite request backed by competitor quotes can create surprisingly favorable outcomes."
Credit Cards and Subscriptions
Recurring financial products often continue unchecked for years. One simple phone call or annual review can produce surprisingly large savings.
Jacob Bayer, a CFP and founder of Jacob Bayer Wealth Management, suggested three bills ideal to negotiate or shop around for are: credit card annual percentage rates (APRs), subscriptions that auto-renew and cable or insurance bills that auto-renew at a loyalty rate that isn’t actually low.
“All three are negotiable or cancellable in minutes and almost nobody treats them that way,” he said.
He noted research from a recent Lending Tree survey showed that 84% of cardholders who asked their issuer for a lower APR got one, with an average reduction of 6.3 percentage points. On a $5,000 balance carried for a year at the current national average of 21.52% for accounts accruing interest, that reduction is worth roughly $315 in interest, "for the cost of a phone call," he said.
An annual walk through a bank statement, line by line, catches most of these excess expenditures, he said.
Discounts Many People Forget To Ask About
Many businesses offer discounts that aren't automatically applied, such as employer discounts, autopay savings, paperless billing credits, bundled insurance discounts, military or educator discounts, student pricing and warehouse club memberships, Stroup said.
“Before making a purchase, ask, 'Are there any discounts or promotions I qualify for?' The answer is often yes."
Companies can change their promotions any time, Mauro pointed out, “so customers must be reminded about the changes."
Learning To Love Negotiating
Negotiating doesn't require confrontation, according to Stroup.
“In reality, respectful negotiation is simply asking questions," he said. "Companies expect price discussions and the worst outcome is usually hearing 'no.' The potential savings often far outweigh the brief discomfort of asking."
He offered a useful script:
"I've enjoyed being a customer, but I'm reviewing my budget. Are there any discounts, loyalty offers or lower-cost plans available?"
Bayer offered another question consumers can ask:
"Is this still the best price you can offer a customer like me?”
Mauro offered still another:
"I have compared my options. Could you tell me about possible promotions, discount offers or cheap plans that I can qualify for?"
Being Intentional
The dollars you save negotiating or adjusting recurring expenses can be redirected toward many other financial priorities, such as building an emergency fund, investing or paying down debt. Consistently asking thoughtful questions is one of the simplest ways to improve your financial life.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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