example, let’s say you have an internet service provider (ISP) that charges $50 per month for their service. As a loyal customer, you have been paying this amount consistently for several years. However, if a new customer were to sign up for the exact same service, they would only have to pay $25 per month for the first year. This means that as a loyal customer, you are essentially paying double what a new customer would pay.
This pattern of penalizing loyalty and rewarding new customers is prevalent in almost every auto-renew service you have. Whether it’s your phone plan, insurance policy, newspaper subscription, streaming service, rewards credit card, or satellite radio, the story is the same. Companies offer enticing introductory pricing to attract new customers, but once you’re locked into the auto-renew cycle, those discounts disappear, and you end up paying more than you should.
This is why dedicating one day a year to cancel every auto-renew subscription service you have, and then signing up again under your spouse/roommate’s name, can be a financially beneficial strategy. By doing so, you become a new customer once again and are eligible for those introductory pricing offers. This tactic allows you to save significant amounts of money, especially if you have multiple subscriptions.
However, it’s important to note that this process can be time-consuming and frustrating. The day dedicated to canceling and re-signing up for subscriptions is likely to be filled with long hold times, repetitive menu options, and endless recordings telling you that their menu options have changed. It is a trade-off between the time and effort you invest in this process versus the potential financial gain.
To illustrate the financial impact, let’s take a look at the potential savings. Suppose you have five different subscriptions that each cost $50 per month. By canceling and re-signing up under a new name, you could save $25 per month on each subscription, resulting in a total monthly savings of $125. Over the course of a year, this translates to $1,500 in savings just by taking advantage of the introductory pricing.
Furthermore, it’s important to understand that the increasing cost of living is not solely due to inflation. The practice of offering discounts to new customers while charging loyal customers higher prices is a significant factor. Companies use this tactic to attract new business, but customers who remain loyal end up shouldering the burden of higher costs.
While canceling and re-signing up for subscriptions may seem like a hassle, the potential savings and financial benefits cannot be overlooked. Taking the time to go through this process once a year can result in substantial cost savings and ensure that you are not overpaying for services that newer customers are receiving at a fraction of the price.
In addition to the financial aspect, this strategy can also serve as a reminder to evaluate the value and necessity of the subscriptions you have. Sometimes we sign up for services and forget about them, only to realize later that we are not utilizing them to their full extent. By going through the cancellation and re-signup process, you have the opportunity to reassess each subscription and determine if it’s truly worth the cost.
It’s important to mention that this strategy may not work for all services, as some companies have measures in place to prevent customers from taking advantage of introductory pricing repeatedly. Therefore, it’s crucial to do your research and understand the terms and conditions of each subscription before proceeding with the cancellation and re-signup process.
In conclusion, almost every auto-renew service you have penalizes loyalty and rewards new customers with introductory pricing. By dedicating one day a year to canceling and re-signing up for these subscriptions under a different name, you can take advantage of the discounted rates and save significant amounts of money. While the process may be time-consuming and frustrating, the potential financial gain and the opportunity to reassess the value of your subscriptions make it worth considering. Just be sure to research each subscription and understand the terms and conditions before proceeding.
Also: shop around for other providers.
Im also a big fan of calling up and asking what they can do for me for my loyalty. Its gotten me a lot of pay reductions.
This applies to your internet and phone as well. It’s almost like the loyal customers are subsidizing the acquisition of new customers for the company.
This, absolutely. I’m subscribed to Adobe for their CC Suit. I don’t auto renew, because if I pretend that I will cancel the subscription, they give me a discount for another year.
*Canadian Telecoms monitoring OP internet traffic as we speak.*
can we get a list of services that do/might do this?? even ones that are on the “wont do” u never know unless u try but tbh im quite unsure what u mean cuz i got AAA and my onsurance as auto renewal and costco but i dont think i get any savings lol
Make sure you switch cable between your spouse and yourself periodically too. You can get new customer pricing by switching to a different adult in your house.
Great advice. I do this every time I see a price increase. I call and say *insert competitor name here* is offering this service for this and they will adjust the price to keep you with them.
My password manager lets me have folders. I have one folder just for these types of subscriptions, so all the info on how to login to all of my subscriptions is in one place. I can also quickly see at a glance how many renewing subscriptions I have ongoing.
Put them in your calendar when you sign up. Keeping track is easy then
I used to have to do this every year for my internet service. Call them up yes send me to customer retention please. Okay yeah imma cancel unless you let me pay way less for my internet. Okay hows XX sound good deal.
I have done my best to eliminate auto renew stuff. I am down to Hulu plus no ads with HBO and thats like 32 bucks so not too shabby.
I just cancelled a $30/month membership and was immediately offered $15/month for the next 3 months. I cancelled anyway but it’s amazing what deals you can get sometimes.
What in the world are you subscribing to that you could save $100 a month on?
This is part of my annual Financial Health Day. I take one day a year to do the following:
* review all my recurring expenses and see if there is anything I can do to update/renew/cancel/etc.
* review all my financial accounts to confirm beneficiaries and review automatic xfers and pymts.
* refine my budget, adjust allocations, and update projections.
* request my [free credit report](https://www.freecreditreport.com/) and check for errors.
* review my insurance policies and call about deductibles/updates/savings.
* review my personal inventory for potential insurance claims (very important in hurricane prone area).
* review my income and see if there is room to do a Roth conversion for my [Ladder]( https://www.investopedia.com/how-roth-conversion-ladder-works-5214808)at a low tax rate (much easier now I’m retired).
Financial Health Day is an important day for my overall mental health.
Not recommended for insurance, they offer loyalty discounts that benefit you more over time, and the rates for new business are higher than renewal policies.
Good tip to cancel subscriptions but bad idea to close credit cards because it will hurt your credit score unnecessarily
To add to this. You don’t have to wait. Insurances will refund you the remaining amount. So it’s easier. Just make sure there’s no conflicts with your car registration and your mortgage company. And always start new insurance before cancelling to avoid any gaps in coverage.
Ex. I have to have consistent coverage 2 months before I can renew my car resignation. My bank for the mortgage needs to be informed, escrow will pay, refund from previous insurance, and redeposit that refund into my escrow account.
I saved over $1500 this year by swapping insurance. Always keep an eye on them.