Stanford Graduate School of Business<\/a>\u00a0has found that this may be a short-sighted strategy. The researchers found that subscriptions that automatically cancel attract more customers than those that auto-renew. Many potential customers understand inertia as well and are more willing to try a subscription if they don\u2019t feel locked in.<\/p>\nNew York and California now have laws requiring businesses to get affirmative consumer consent before renewing subscriptions. Businesses must also provide an easy cancellation method.<\/p>\n
If you\u2019re not in one of those states, consider researching cancellation methods before you sign up for any new subscription. Avoid any company that makes it much harder to cancel than to subscribe. If you can sign up online, for example, you should be able to cancel online and not have to call in during limited business hours or visit a physical location. If you do subscribe, add a note to your calendar when the subscription or trial period ends, so you can evaluate whether you\u2019re getting enough value to continue subscribing.<\/p>\n
Dear Liz:\u00a0You recently advised a couple who have excellent credit, no outstanding loans and a low credit utilization rate that they could close their credit card with a company that keeps reducing their credit limit when they don\u2019t spend enough on their card. The writer has to contact the credit card company every time to get it restored to its original credit card limit. You suggested they could close their account but you didn\u2019t address their question about whether they\u2019d be better off settling for a reduced credit limit. Wouldn\u2019t a reduced credit limit harm one\u2019s credit scores less than closing an account?<\/p>\n
A.\u00a0Probably, but the point was that closing the account was unlikely to do significant or lasting harm as long as they had other credit cards. The couple could make the effort to try to keep the account open, but the hassle might not be worth the limited benefit to their credit scores.<\/p>\n
People with excellent credit are often overly fearful about closing credit cards. It\u2019s true that you generally should avoid closing accounts if your scores aren\u2019t great or if you\u2019re in the market for a major loan, such as a mortgage. It\u2019s also a good idea to keep a big gap between the amount of credit you use (your balance) and the amount you have (your credit limit). That could mean hanging on to your highest-limit cards or having the credit limit of a card you\u2019re closing transferred to another card you\u2019re keeping.<\/p>\n
But you shouldn\u2019t be afraid of closing accounts if you have a good reason to do so.<\/p>\n
Dear Liz:\u00a0When Roth conversions came along, they were touted as a way to avoid taxable required minimum distributions in retirement. I had built up a solid \u201ctraditional\u201d account, and saw no reason to add to my tax bill by converting. I ignored the noise, although I did open and contribute to a Roth account in addition to my traditional IRA.<\/p>\n
Now in my 70s, living on Social Security, RMDs and some investment income, I\u2019m grateful I blocked the noise. In fact, I have the RMD income to thank for getting me to realize that I could afford to retire. If I\u2019d converted, I\u2019d probably still be working and afraid to spend my tax-free Roth. And it turns out the tax bite on the RMD isn\u2019t all that bad.<\/p>\n
A. Thanks for sharing your perspective!<\/p>\n
Liz Weston, certified financial planner, is a personal finance columnist. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the \u201cContact\u201d form at asklizweston.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Dear Liz:\u00a0I paid for several magazine subscriptions online. At the end of the transaction, I received notice that…\n","protected":false},"author":2,"featured_media":34696,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[387,2087,74,76,75],"class_list":{"0":"post-34695","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-diego","8":"tag-business","9":"tag-business-columns","10":"tag-san-diego","11":"tag-san-diego-headlines","12":"tag-san-diego-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/34695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=34695"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/34695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/34696"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=34695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=34695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=34695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}