Dear Liz: In a recent column you wrote about the importance of paying online and the dangers of writing checks. Why does paying online come with a fee? Is it really justified to pay a “technology fee” of $12 to pay my insurance bill online? It seems to me that it should be faster and easier for the recipient if I pay online, and that NO fee is the correct amount.
Answer: Agreed. “Pay to pay” fees are annoying. It’s one thing if an entity is passing on a small transaction cost, like the 2% or 3% that payment networks may charge to process your credit or debit card payment. It’s quite another when a company charges “convenience fees” simply for accepting online payments, when such payments are far safer and more secure than sending checks through the mail. To be clear, most companies don’t charge such fees but some insurers have been slow to join the 21st century.
You may have other options. Your insurer’s site may allow you to set up automatic payments that come directly from your checking account. Or your bank’s online bill pay may have an option to send electronic payments directly to the insurer from your account.
If not, and your only safe option is to incur the fee, it’s probably time to shop for a better insurer.
Question I have accumulated too many credit cards, sometimes to get bonus frequent flier miles. The frequent flier miles cards all have annual fees. I always pay cards in full each month.
My credit score is 800 plus every month. I have heard that your credit score is dinged when you close out a credit score. Is that true and by how much.
How do you recommend reducing the number of credit cards?
Closing cards can hurt your scores, so I’ll touch on some strategies for reducing your card portfolio in a future column.