4 Services that are a Total Waste of Cash

In 2012, the dollar divas at MissMoneyBee.com want you to cut wasteful spending and get the most bang for your buck!  But you can’t do that if you are wasting your money on frivolous and unnecessary “services.” Why would anyone want to pay for something that they can easily do on their own?  Get informed by reading my list of services that you should axe in the New Year!  Once you have cut these wasteful expenses out of your budget, take that money and do something more useful with it like increase your 401 (k) contributions or emergency savings.

1. Insurance on electronics – Most electronics like flat screen televisions or DVD players come with a 30 – 90 day warranty from the retailer on top of a 2+ year warranty from the manufacturer. When you are at the checkout line paying for your next tech item, don’t waste your $30 – $50 on “insurance” when you can easily contact the manufacturer for FREE!

2. Credit Score Monitoring – Although knowing your credit score is essential to being financially savvy, you do not need a 24/7 monitoring service. You would be much better off simply getting your free yearly credit score and report from AnnualCreditReport.com, and then perhaps paying one of the major credit bureaus (Experian, Equifax, and Trans-Union) for a second and third peek later on. Experian offers $1 access to your credit score in connection with an easy-to-cancel trial.

3. Credit Score Repair – Some creditors offer credit score repair services but don’t be fooled! Many people fall prey to credit score repair sales pitches because they don’t understand credit and believe the experts know more and can push a few buttons to improve their credit overnight. The truth is — they can’t! You can repair/improve your credit at on your own at no cost! A FICO credit score, the best-known and most widely used credit score model in the U.S., can only be improved 5 ways:

• Payment history (35%) – Don’t pay your bills late, especially on items such as a mortgage, credit card or automobile loan.  By making consistent and on-time payments, your FICO score can increase significantly.
• Credit utilization (30%) — This is the ratio of current revolving debt (such as credit card balances) to your credit limit. FICO scores can be improved by paying off debt and lowering your credit utilization ratio. Also, do not close revolving accounts that have been opened for a long period of time because that can have a negative impact on your FICO score.
• Length of credit history (15%) — As your credit history ages, it has a positive impact on your FICO score.
• Types of credit used (10%) — You can improve your credit by having a history of managing different types of credit like a mortgage, student loan, credit card, etc.
• Recent searches for credit (10%) — Credit inquiries, which occur when consumers are seeking new credit, can hurt scores. Individuals shopping for a mortgage or auto loan over a short period (approximately 2 weeks) will not experience a decrease in their scores as a result of these types of inquiries, but those who apply for 15 credit cards over the course of a month will see a drop in their credit score. All credit inquiries are recorded and displayed on credit reports for a period of time, credit inquiries that were made by the owner (self-check), by an employer (for employee verification) or by companies initiating pre-screened offers of credit or insurance do not have any impact on a credit score.

4. Credit Monitoring – For $10 – $15 per month, credit reporting bureaus, banks and other financial institutions offer customers unlimited access to their credit status in an effort to prevent identity theft.  Simply put, if you have little or no credit and have never been a victim of identity theft, don’t waste your nickels and dimes.  Credit monitoring will only alert you after your identity has been compromised.  Most credit card companies offer reimbursements for unauthorized charges, so there’s limited risk .