Yahoo Finance 4 Ways to Protect Yourself From Losing Money When You Pay for Packages
There are few things worse than spending your hard-earned money on a big renovation package in anticipation of your dream home, and then realising you got cheated because the contractors had the skill of a 6-year-old Lego builder.
Unfortunately, that’s happening to more people in Singapore, as they spend increasingly more on renovations and the number of complaints against contractors continues to grow.
Renovation customers aren’t the only ones at risk of plonking down the cash on a big package and then getting let down.
Thousands of people who sign up for gym memberships and spa packages get left in a lurch each year when the businesses they’ve paid hundreds or even thousands of dollars to unceremoniously shut down. High-profile gym California Fitness shut down last year, and countless spa chains are disappearing each year, including Calla Spa most recently.
So how can you protect yourself before shelling out the cash for a package? Here are some general rules to follow, no matter what kind of business you’re patronising.
Always opt to pay in instalments wherever possible
Avoid as much as possible putting up a lump sum for any sort of subscription or long drawn out service. You always want to have the option to stop payments if the business closes down or has failed to deliver on their promises.
Note paying in instalments is not the same thing as using your credit card’s instalment plan. The latter does not protect you from anything. Even if the gym/spa shuts down 24 hours after you’ve paid for your package, you’ll still owe the bank the full amount.
This is where it can often be helpful to patronise smaller businesses instead of big chain gyms or spas, which tend to be more rigid with their policies. A smaller business might be more willing to offer a package you can pay for incrementally or in installments rather than insist you pay for one or two years’ worth at one go.
When it comes to renovation, bargaining can get you very far, so avoid paying in full no matter what. Bargain to lower the price of your deposit, as well as to pay progressive sums based on what’s been finished. This is standard practice in the industry, and any contractor who insists on being paid in full upfront should be given a miss.
Avoid packages wherever possible
Paying for big packages, whether at gyms, spas, manicurists and so on, are a bad idea as you’ll be left in a lurch if the business closes down.
What’s more, while these packages might claim to save you money at every session, you may still end up spending more overall, as you probably would not go for as many sessions without the package.
So always search for cheaper alternatives that enable you to escape buying into a package. For example, if you’re tempted to join a gym but balk at the thought of having to pay for 12-24 months of use, look for a smaller, cheaper neighbourhood gym or just use the cheap ActiveSG gyms instead.
Quit when you realise it’s not serving you anymore
Even if the business doesn’t shut down, the worst thing you can do is to continue holding on to a package that you’ve realised sucks, or that you don’t use anymore.
When you realise the business you’ve paid so much money to is incompetent, or you’re just too lazy to go to the gym/get your nails done or whatever, it’s time to look for ways to get rid of your package.
Many people try to sell their gym memberships online, which makes sense if you’ve discovered that working out makes you feel like a monkey. If you’re holding on to a transferable package at a spa, try to sell it online or to friends/colleagues by promising them a discount.
The biggest advantage of insisting on paying for renovations in progressive installments is that you’re free to fire the contractors if you realise they’re doing a crappy job.
Share with a friend
This might not be possible for all types of packages, but with those at spas, manicurists and other health and beauty services, it is often possible to share your package with others. Instead of signing up for the package all by your lonesome and taking on all the risk on your own, split it with a friend.
You’ll get to enjoy the perks of discounted per session rates with half the commitment and financial risk.
Have you ever regretted paying for a big package? Share your horror stories in the comments!
The post 4 Ways to Protect Yourself From Losing Money When You Pay for Packages appeared first on the MoneySmart blog.
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