Yesterday I turned 26. I partied hard. And did not write a blog post. Here is an old one. Love you.
Yup, that’s right. I knowingly throw away $5 a month in installment fees. I pay my car insurance with my credit card, and every time I do, I get hit with the stupid installment fee. The fee is lame and I have options to avoid paying it, but I don’t. I know, WTF?!
Here are three ways I can eliminate or reduce paying these installment fees.
1) Pay the balance in full on my credit card. This method means I pay the remaining $573 balance today, get dinged with one more $5 installment fee for using my credit card, and then not have to pay again until my policy renews.
2) Make a few larger than minimum payments. My rate is $119 a month so I could make two $290 payments so I don’t have such a large chunk taken out of my savings at one time. It would reduce the overall amount installment fees that I paid over the course of a year.
3) Set up an Electronic Funds Transfer (EFT) through my checking account. It’s a really cool idea. My insurance company will pull the $119 from my checking account each month without me having to do anything. You basically give permission for them to access your account and withdraw the payment. There are no installment fees because they are pretty much guaranteed their money and they don’t get a two percent fee from the credit card companies.
The third option is clearly the smartest financially speaking. It would save me $60 a year and allow me to keep a maximum amount of cash on hand, since I wouldn’t have to pay the balance in full. But, I’m really weird because I hate EFTs. I only use them for my student loan payments (because it lowers my overall interest rate). I just feel uneasy about allowing people access to my checking account. There is security in knowing I make the payment when I want and not having to trust the electronic gods with my payment.
This is definitely PERSONAL finance, so I’m trying to weigh how much I want to be personal with how much I want to be finance. I will probably end up setting up the EFT, even though it’s not my preferred payment method. In this dual, finances trump personal preference. Does anyone have any EFT horror stories? Is $60 an okay amount of money to “throw away” if it calms my nerves a little bit? Blah, I guess I should be happy that a $5 installment fee is my biggest financial concern right now.