If You Pay Interet Once Do You Pay Again?
Millions of Americans pay their bills by writing checks or setting up automated withdrawals from their bank accounts on a monthly basis.
Many of those same people may besides be spending more than they demand to by missing the opportunity to go a discount for paying in advance.
Payment in advance: A money-saving strategy that works (sometimes)
Nosotros know what you're probably thinking: "Payment in advance? Why would I do that?" Yes, paying in advance can be risky in some cases, just in that location are actually some very audio reasons why yous should consider it.
The #1 reason is because there'due south often a coin-saving incentive — but it's not a strategy that works for all your bills.
Hither are bills you should pay in accelerate
Money expert Clark Howard says, "Usually any kind of insurance premium is worth paying in advance — if you can beget to exercise it."
Amid other kinds of insurance you might consider paying in advance, this would definitely include the large 3:
- Dwelling house insurance
- Auto insurance
- Life insurance
"For life insurance, y'all can go a big cut," Clark says. "For case, an entrepreneur might pay one lump sum for a policy and they'll get a big discount by paying it all up front."
Some other businesses, like pest command services, orthodontics programs and the like will give y'all discounts for paying up front, as well. Only as we mentioned at the starting time, non all advance payments are equal. Brand sure yous are dealing with a reputable company if you're paying up front.
What not to pay in advance
There are some times that y'all absolutely exercise not want to pay in advance, fifty-fifty if in that location is a discount involved. Here are a few:
- Contractors: While they may offer a discount for upfront payment, y'all may non be pleased with the terminate result. Pay as you go or when the job is consummate. Disreputable contractors make off with advance payments all of the time.
- Hotels: The vast majority of hotels may require a eolith simply many do not require payment in full to book a room. And they practise not often offering discounts for advance payments. Why not settle upwards at the end of your stay?
- Utilities: Don't pay your utilities in advance. Municipalities, sewage and ability companies make billing mistakes all the time. Check your bill for accuracy earlier you pay.
Employ due caution when deciding whether to pay in accelerate or non
If a company goes bust and y'all've paid in accelerate, you may be out of luck.
Clark says because how long a company has been effectually is no sure way not to lose your shirt. Afterward all, how many of us however have Sears or Toys R Us gift cards lying around?
"The danger with anything is that if you lot pay in accelerate and they wing the coop, y'all're out of luck," he says.
E'er prepay with a credit card — not debit
The run a risk that a business may bomb is all the more reason you should always utilise a credit card for accelerate payments.
The consumer protections afforded to credit card users — especially if a product is not delivered or a service performed — are much greater than they are with debit cards or checking business relationship drafts.
Final thought
The takeaway hither is to pay for things in advance when it makes sense to do so. And retrieve these parting words from Clark:
"There's always a danger when y'all prepay, no matter how much you salve."
More stories you might enjoy from Clark.com:
- Automatic bill pay: What you need to know
- How to meliorate your credit score by 100 points in thirty days
- Best online banks: Complimentary checking and high-interest savings accounts
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Source: https://clark.com/personal-finance-credit/payment-in-advance/
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