Yeah, welcome to the next episode of Bank Chats 2 Cents. And I of course am Drew Thomas and with me is Jeff Matevish Jeff Matevish. So, last time, whenever we sat down, the two of us sat down, we were talking about subscriptions and things like that. And then, you then after the fact told a story about something relating to subscriptions, but not exactly the same. So, let's start with that, and then we'll get into what today's actual topic is. We'll, we'll see people can figure out what the topic is based on your story.
Okay. So, where do we start? So, we're into the new year. We are, yeah, Happy New Year, by the way, Happy New Year. Yeah. So, we're into the new year, and this is the time where, you know, a good chunk of the population decide to you know, get fit and join a gym for that first month, remove that chunk that I have around my way, and then and then stop going after January. Yeah. So, I thought about doing that last year, and I got so far as to go into the gym and inquire about opening an account. And I was assuming I could pay with a credit card or a check or something like that. But they require...or cash. I mean, I'd, cash is king with me, yeah. Legal tender. Yeah, yeah, yeah. I, so I tried to open an account and they required to link my bank account with, with them. So, that you know, I guess I didn't not pay, and you know, they could auto tap my, my account for payment. And that kind of scared me. So, I'm still as heavy as I was last year. I did not join the gym. But yeah, I mean, what, so what are your thoughts on, on linking bank accounts or auto payment in general?
Yeah, I mean, there, there are, that's a good, I mean, that's a good topic. And if you haven't figured it out, that is our topic for today. For those of you that didn't read it before you started hitting play. No, auto paying accounts, I you know, there's a lot of stuff out there that promotes auto pay, I know that my cell phone provider gives me a discount for auto pay. So, because you, okay, so you can, you can auto pay a couple ways. You can auto pay directly to the vendor, and then you can, you can do sort of automatic payments through your bank, like through bill pay, for example, you can set up an automatic payment. But they're a little bit different, because you're controlling the bill pay through your bank. Whereas when you sign up for auto pay, and you're giving your routing number and your account number and so forth to that vendor, and you're saying you're allowed to automatically debit my account on this date for this service every month, I think that's a, it's a little bit different. You're kind of giving them control a little more.
So, so bill pay is you're pushing a payment to the vendor, whereas auto pay is the vendor is pulling a payment? Yeah, yeah.
Yeah, that's a good point. So, so yeah, I mean, I do have auto pay on my cell phone, because I want the $10 a month. But you know, it's also, it's also a double-edged sword. Because you know, the bottom line is they're giving you that discount, but they just they want to make sure you're making the payment is what it comes down to. They don't want people; they don't want people defaulting and making late payments and stuff. So, it's in the vendors’ best interest to auto debit your account, so they know they're getting paid. But the trick becomes, is there money in your account to pull? Yeah, so you know, we were looking at a couple of different articles about this, because while we both have personal experience with it, the bottom line is we're not a vendor, I don't, I don't know what I can pull and what I can't pull. So, I started looking around at some stuff, and there was an article from CBS News that was published back in August of last year. It is last year now, how about that? Just talking about, you know, the benefits or the pros and cons of auto pay. And they said that, you know, one of the benefits to auto pay is that, you know, it means you'll never have to pay late fees, right. So, a lot of these organizations, they charge you a late fee, if you're if you're late on your payment, whether it's a credit card, or your cell phone or whatever. If it's auto debit, then there's no late fees, right? One of the cons is that if you don't have enough money in your account, right, your bills are not going to get paid. And you may not notice because it's on auto pay, and you think that the bills are coming out without you having to do anything, and then all of a sudden, it's not.
Well, so, are you talking about auto pay with a credit card or with a with a bank account. So, if there's not enough money in the account, right, it wouldn't make any difference with a credit card until you have to go pay their credit card.
True, but then you're, with a credit card, if you think about it, you're paying a lot more interest then, too. Oh, yeah, yeah, okay. So, you're, if you're not paying your credit card off every month, now you're paying interest on whatever bill you're paying. Okay. Yeah, so, yeah, but you could I mean, I guess you're right, you could set up auto pay on a credit card as your as your funding source. The other side of that is setting up auto pay to pay your credit card bill. Oh, that's scary. Isn't it though?
We just talked about that on the last one, you know, always look at your bill.
Yeah, and if you're not looking at your bill, then you don't know first of all, if there's fraudulent stuff on there. But even at that, if you're, if you're not looking at your bill, you know, just because your minimum payment last month was $100, if you racked up a bunch of stuff on your credit card last month for Christmas, and then you know, your minimum payment goes to $140, but your, your auto pay is set for $100, now, you're going to still be late.
Right. Or you only have $100 in your, your bank account, and you're over drafting then. Yeah, yeah.
And if you're, if you're late on the credit card, then they're going to ding you with a late fee, and you're going to pay interest on the late fee, and it just, it just becomes a snowball like huge really fast. Okay, I don't know. So, I'm guessing you did not, you said you did not sign up for the gym, right? Was it? Was it just because of the auto pay? Like, what are your, what were your concerns about auto pay?
I didn't know much about it. I mean, so it's one thing to fight a credit card transaction, you know, something fraudulent or something that, you know, I paid for, but I didn't get what I had paid for. I can always fight that transaction with my credit card company. How does that work with you know, if you have a bank account tied to, to a vendor? Yeah. If I decided I wanted to stop going to the gym and cancel my membership. But they for some reason, don't cancel it for an extra month, do I get my money back? And how?
Yeah, I guess you I mean, you'd have to, I guess you'd have to fight the vendor, like you'd have to find the gym. Okay. Yeah.
I mean, I, nobody can fight the gym. That's bigger than me, no.
Wasn't there, wasn't there a Friends episode or something about that? About like, I want to quit the gym? I think so, I think there was, you know, it was, you can't get out, it's impossible. Yeah. So, you would, I guess you're right. I guess you'd have to fight to try to get the money from them. Then, well, and then you also said something interesting about the, you said that you're under contract, like if you quit your contract, yeah. So, you could cancel your auto pay, but that doesn't cancel your contract. Right. And that's another thing to remember about these auto pay solutions is that, you know, if you're like me, and you have your cell phone on auto pay, and you decide, okay, I don't want my, I don't want, you know, my cell phone provider pulling my money automatically out of my account anymore. I'm going to, I'm going to start paying it manually. And then you forget, just canceling your auto pay doesn't cancel your contract, they're still going to keep billing you. Right? And you don't want to end up with a letter in the mail saying that you're five months past due on your cell phone bill or something like that. Although I guess they probably shut it off before then, but you'd think but you never know. Yeah, yeah. Yeah, I don't know. I get it. I, my dad, I use him a lot as an example, but my dad is one of those ones. He was very resistant at first, whenever even the utility companies started, not insisting because I don't think anybody can make you pay through auto pay. They can encourage it. I don't know that there's any vendor out there that can legally force you to pay your bill that way.
They can make it less attractive to not pay, yeah, with auto pay. Yeah.
But still, it was, you know, it was some ridiculous fee to pay by credit card or check or something like that. And he was still very, very resistant to giving out his bank account information, because he was like, look, once I give them, what's to stop them from debiting anything else that they want to, they want to take? And I mean, your contract says that they can only take what they're owed, but that doesn't mean that somebody in that company couldn't be malicious. Yeah, yeah. And deciding, I mean, can you imagine if somebody at one of the major cell phone providers decided that they just wanted to take an extra $5 out of every person that was a subscriber to that cell phone service and just add an extra fee? Yeah, just wrap it into that fee section, yeah, that you have no idea what it is. It ends up being a $5, "I'm going to vacation permanently in Cabo." Oh, yeah. You know, for some, I mean, seriously, though, if you think about there's got to be millions of subscribers to, I mean, there's only three cellphone providers. So, either Verizon, AT&T, T-Mobile. And I'm not saying that could happen there, I'm not saying that at all. But just imagine if somebody did that, if you said $5 on every subscriber, and they just took that money and ran. That would just be insane. Yeah, I'm sure there are legal things to stop that from happening, but that's a, it's an interesting thought experiment.
Yeah. Yeah.
What else do you, so, you don't pay auto pay on anything, then?
Well, I do. I mean, so ironically, just a couple of days ago that I had a utility company say, you know, I got an email from them, and I auto pay with it with a credit card, and they said, you know, because of credit card transaction fees going up, normally, I get a discount on my bill for doing auto pay. That discount is going to be cut in half if I don't connect a bank account. Gotcha. So, to kind of avoid that transaction fee, so I don't know what I'm going to do. I mean, I do have auto pay for like you said, cell phone and a couple of, like streaming services. Haven't gotten rid of those yet.
There's that bugaboo again, let's talk streaming. Yeah, yeah.
Stuff like that. I mean, it does pay stuff that, that is consistent. You know, I have the same total every month on my credit card for that, so I know how much I'm paying. And if I look at my, my statement, and it's ridiculously higher, I know something's wrong. So, I tend to only auto pay for things that can stay consistent.
Yeah, and that was something that was in one of those articles, too. I can't remember if it was the Experian article or the CBS News article or what it was, but they said, if you're going to do auto pay, you should do it on the things that remain consistent throughout the year, you know, within, within maybe within a slight variation. So, chances are, your water bill is within $5, $10 a month, back and forth. You're not suddenly going from probably $20 a month for a water bill to $200 a month for water bill, like, you know, so stuff like that, that's like a consistent fixed fee is better for auto pay than stuff that like, like a credit card that could vary because of Yeah. So, I was also looking at the Consumer Financial Protection Bureau put out an article again, last year, in August, and said that, you know, there's a couple of ways you can stop automatic payments from your bank account. One is, to your point earlier, whenever you said you'd have to fight the gym, you got to call or write the company and tell them you're taking away permission for the company to take automatic payments out of your bank account. And that company's customer service should be able to help you. Oftentimes, there's an online form you can use, or you have to send them an email or write a letter, old school. Do they still teach cursive anymore?
Oh, I don't think so. Yeah, I think my generation was kind of the last ones.
Yeah, you know what, I'm going to digress for just a second here on the whole cursive thing. So, so here's my thing about cursive. You may not necessarily need to write in cursive. But if you want to be able to read it, if you want to read anything written from 1975 back, you kind of need to know cursive, right? I agree. Yep. Yeah. All right. Anyway, you can call or write your bank or your credit union. So, if you've revoked authorization for the company to take automatic payments from your account, their customer service should be able to help you, your bank and credit union might have a form online or something along those lines. And again, you can, you can write a letter or an email. And there are some, some links here in this article from the CFPB that can give you some samples on what those might look like. So, we can put a link in the description, sure, to sort of direct you to some of these. And then there's also the option of doing a stop payment, which you know, any bank could do a stop payment, but there's usually a fee for a stop payment on a check or any kind of electronic debit transaction, something like that. So, just be aware that it's usually cheaper to just go directly to the, to the vendor, and say, I'm revoking my authorization than it is to go through a stop payment at your bank because your bank is probably going to charge you for a stop payment.
Okay, that was a little bit complicated, more so than just handing a vendor a wad of cash. Yeah. So, I'd say one big takeaway I got from this was make sure that the vendors that you're setting up auto payment with are credible, you know, and not going to run away with your money or sell you a false set of goods that you got to fight, yeah, a transaction or something like that.
Yeah, I agree. I mean, you know, we kind of were joking a little bit before about what it would be like, but I mean, really your cell phone provider, your electric company, your water company, your gas company, I mean they're, they're credible vendors. I mean, these are, these are institutions that have been around a long time that are that are held accountable, not only to the government but also to the literally millions of people that do business with them. Yeah, so you're probably okay setting up an auto pay, if you so choose, with somebody like that.
But that jelly of the month club that's got one star rating, you may want to reconsider.
Probably, yeah, I'm thinking you know, jelly of the month club. Alright, Clark. Yeah. So, all right. So, I mean, I think that pretty much covers what we were going to, what we were going to talk about today. I mean, was there anything else that I that I missed here? I don't think so.
No, I'm still not going to join a gym I guess but I'll buy an elliptical or something.
Yeah well, I bought a, but you know what, though? That doesn't work either. I bought a not Peloton. I don't know what it, I don't know what brand it is. It's a bike. It's like a Peloton, but it's not a Peloton. Okay. It was about $4,000 cheaper than a Peloton. But it has you know what, though, if you talk about subscriptions, which we talked about the last 2 Cents, and then you talk about this, there is a subscription to their virtual gym, yeah, right, where they have all these people that guide you through these bike exercises, things like that. And my waistline indicates that I am wasting my money on this virtual gym membership that I'm paying, you know, and that's a gym membership that's in my house and I'm not disciplined enough to go downstairs and use the dang bike.
Hey, YouTube, just watch YouTube while you're riding your bike, I'm sure you can get something very similar.
You know what, you're probably right. There's probably somebody that has ripped off the actual exercise videos from this company and put them on YouTube for free, most likely.
Don't, don't watch copyrighted material, but yeah, well,
YouTube usually takes that stuff down, they're usually pretty good at getting rid of copyrighted material. But yeah, I mean, I'm with you. I keep saying this all the time, but if anybody saw my picture about this, I'm not the poster boy for a gym, that's for sure. I used to be 20 years ago. Not anymore. So, all right. Well, Happy New Year again. Happy New Year Drew. Yeah, January 2024.
It's going to take me a while to start writing that 24 instead of 23.
Just make sure you print it and don't put it in cursive. All right, off we go all right.
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