There’s nothing new about bank and credit card companies offering various programs designed to help account owners. In fact, most companies will sign new individuals up for trials of these programs, whether or not they actually want to try it out. One of the biggest issues with this is that the consumer is expected to cancel the program if they don’t like it. Until then, they get charged monthly for services, such as credit score trackers, identity theft programs, payment protection, and more. None of these services are a necessity for the average consumer, and most people don’t realize that they can have $30 to $50 in service charges each month in their checking or credit card accounts. So then, here are five of these such services.
Identity Theft Programs
First of all, these programs can range in price from about $8.00 all the way up to $15.00 or more. A person who is smart about their finances should already be monitoring their financial accounts. They should be checking their credit report at least once per year. However, nobody really needs the identity theft programs because they are costly and really only alert someone when a change has been found in their credit report. Sadly, these changes usually only rotate between new inquiries made by the actual person or new accounts they opened themselves. Most people won’t ever find themselves using the program to find an actual instance of identity theft against themselves, which makes these types of programs useless.
At around $120 per year or even more, identity theft programs are a complete waste of money. You can monitor your own accounts for free by simply making sure you know where all of your purchases come from and where all of your money goes to. Check your credit reports from all three bureaus at least once per year and you should consider yourself safe from identity theft. Undoubtedly, a person’s best tool for combating such a theft is to monitor all of their accounts diligently. You don’t need a costly program to do that job for you.
Credit Score Trackers
Obviously, a credit score tracker just keeps track of your credit score – except not really. Almost all supposed “credit score” trackers will not give you your actual FICO credit score. In fact, these companies offering the program use a similar (but not the exact same one) formula to come up with an estimated FICO score. Amusingly, many people call these estimated FICO scores “FAKO” scores. A person will end up paying around $8.00 per month for their monthly “credit” score, which amounts to almost $100.00 per year spent on this useless program. The only perk a user will get from a credit score tracker is the ability to check their credit report on a regular basis for no extra charge, but not all trackers allow a consumer to do this.
Still, credit score trackers are relatively useless because they do not offer you a FICO score. You might receive a high score from this tracker, but your real score could be much, much lower. Also, you don’t need to check your credit report too often, so that benefit of these programs doesn’t really matter either. Most people are just better off not signing up for a credit score tracker or getting rid of one that they currently have.
Keep The Change
Only Bank of America offers “Keep The Change”, but it really serves no purpose and can end up costing a person a lot of money. Simply put, “Keep The Change” rounds off the change amounts on almost all of your checking account/debit purchases to a whole dollar amount. The difference is moved from your checking account to your savings account. Bank of America will match the first 3 months of your purchases completely and then will match 5% of your Keep the Change savings afterward. Sure, the program sounds good in theory, but there are plenty of problems with it.
The program will constantly reduce the balance in your checking account, which can result in issues if you end up with an overdraft due to insufficient funds on a check or a purchase. On top of this, the payouts that you receive annually are counted as interest, which makes sense but can be annoying for some. “Keep The Change” is a sound idea, but it isn’t as helpful for most people in actual practice. One of the biggest problems with the program is that a person can just move the money back from their savings account. Unfortunately, this can result in further fees if done too many times.
Most people should be familiar with Payment Protection. Of course, it varies between each credit card company, but it mostly is designed to protect a person in case they cannot make a payment, whether they have lost their job or just can’t pay in a particular month. The scope of events that can be used to take care of payments are pretty wide, but most individuals won’t face those problems. Luckily, Payment Protection plans are usually not that expensive – sometimes costing only $0.99 per 100 dollars on your credit card balance. A good amount of these programs will make either an emergency one-time (per year) payment on your monthly bill or they will make your payments for your for a lengthy amount of time if you have an illness or lose your job (or other reasons).
Sure, this program sounds pretty cheap, but you absolutely do not need a Payment Protection plan. They are unnecessary for 99% of people because they will almost always just end up as another charge on your credit card. How are you supposed to pay down your credit balance when a useless Payment Protection plan keeps raising it each month? Therefore, you should drop this program and any others like it as soon as you can because it will do nothing for you for a long, long time.
Extended Warranty Programs
Everybody knows about extended warranties. Obviously, you can get them from more places than just the bank or credit card company. Just about every store will offer you an extended warranty on an electronic or other expensive item. Most of them will extend your coverage in case of damage or defect for a year or more. Unfortunately, these plans can be expensive and the terms can be extremely strict. You don’t need another 6 months of coverage for $19.99 or another year for $29.99. These plans can be even more expensive for bigger items.
Either way, nobody really needs an extended warranty on any device or electronic they own. You can spend 100’s of dollars on extended warranties for all the items you buy, but you probably won’t end up using these warranties within their active periods. Therefore, you’ll spend $20 to $50 or more on an extended warranty that will just expire before you actually get to or need to use it. It might give you peace of mind to know that you’ve got your item covered in case of a problem, but most devices and electronics wont’ have any problems for their lifetime of use. So then, you basically pay a bunch of extra money for absolutely nothing. Stay away from extended warranty programs offered by banks or credit card companies.
Don’t make the wrong moves.
Of course, that also means that you shouldn’t be wasting your money. Banks and credit card companies will throw a bunch of useless and typically costly programs your way. In reality, you don’t need a free trial or anything like that because these programs are useless. Only a person who wants to throw away their money should opt-in to these types of programs. Sadly, you won’t get much out of them, but the credit card companies and banks will get plenty of money out of your pocket.