Happy YesterBirthday to me!

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.

17 thoughts on “Happy YesterBirthday to me!

  1. Happy birthday, Ninja!

    I don’t have any EFT horror stories, but I DO share your fear of them. I don’t mind setting up auto-charged on my credit card, because the worst that could happen were there a huge mistake is that I carry a balance for a little while until it gets resolved, but what if that happened with my chequing account? I’d have to pull money out of savings to pay my bills until it was resolved, would definitely get hit with fees for going below my minimum balance and maybe even get hit with overdraft fees if it was a large amount. Ugh. Too many what ifs for me. It’s for this reason that after three years I still refuse to set up EFT for my rent.

  2. Happy Birthday, awww you are a cancer. That explains alot!
    If I had $50k in savings, i’d avoid the fees all together and pay in a lump sum annually. $60 a year takes a while to recoup in savings acct interest. If I had the money to pay it all at once I’d do that and repay my savings an extra $60 a month if it made me feel better. Signed fellow cancer.

  3. I don’t like the idea of any outside vendor directly accessing my checking account. If the fee concerns you that much, just pay the entire balance as a lump sum as Mary M suggests. I realize that may eat into the money you were putting aside for my birthday present this September, but I can settle for something less than the Porsche.

  4. Happy Birthday! I actually thought about you yesterday. I was running a half marathon at Gas Works Park. Someone had a sign that read “Chuck Norris is still asleep and you’ve already run 9 miles!”. Pretty funny! Then, of course, I though about personal finance for the next 4.1 miles:)

  5. I just pay the full premium every 6 months, while moving enough money from checking to savings each paycheck to cover the next premium, so I’m never caught off guard.

  6. I’ve yet to encounter an EFT horror story for our finances; we have our property taxes, condo fees, car/condo insurance, and mortgage paid monthly via EFT, but I draw the line at having our cable bill paid the same way. We’ve caught an error or two on the cable bill (I’ve had friends be double-billed, and getting it adjusted was a PITA), so we pay that bill online before the due-date. The items that come out via EFT right now are all standard amounts, so I’m a little more comfortable in having them paid automatically.

    Happy Belated Birthday!! My ex was a Cancer… in more ways than one… thanks for proving all Cancers aren’t cut from the same cloth 😉

  7. Anyone else think those payments are really high? I insure three vehicles for $428 every six months. Two full coverage and one liability. I dont have ninja throwing star rims though.

  8. Happy birthday man! I turn 25 precisely one week after you turn 26. Musn’t…compare…financial…situations…

  9. Every time I’ve set up an EFT (twice) I get double billed or some other freak situation occurs where they take more money than I’ve agreed to. I HATE EFTs. Hate hate hate hate hate

  10. I’m surprised that you’re not paying in full each year (unless you’re unhappy with your insurance and thinking of switching…). My car insurance averages out to $10 less/month if I pay the six-month premium. So you’d not only save money on car insurance (I swear I’m not insured through Geico), but also still get those points on your credit card, only incurring fees once (I assume you have a points CC).

    Also – I realize this is a dated post. I’d love for you to do a follow up and let us know what you eventually decided (and why).

  11. Happy belated birthday!
    I was never worried about EFTs until the last autopay I set up didn’t pay. It was for a credit card that I always pay in full. I wanted to use the automatic payment option so I wouldn’t have to remember another due date every month. I set up autopay well in advance (over a month) so it should have been guaranteed to pay. Sure enough the due date came and went but the autopay didn’t work. I got slapped with a late fee and interest. Not cool! I called the cc company and luckily they admitted there was a computer glitch and it was their fault. They would refund the late fee and interest. However they couldn’t guarantee the late payment wouldn’t affect my credit. WTH! Now I don’t trust ETFs and I am paranoid.

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