My grandmother always said that loyalty was important. You probably had someone in your family who said the same. While the advice is valid in many circumstances, customer loyalty doesn't always pay - literally.
You might be losing money by sticking with the same service providers. That's why you should take the time to shop around to see if others can offer you a better deal. Here are five service providers, in particular, that you should consider breaking up with - or at least threaten to leave - to score substantial savings.
Your auto insurer. Market research firm
"The unfortunate truth is, being a loyal customer to an insurance company just doesn't necessarily pay," says
Your bank. Chances are you can pay lower fees and earn more interest by switching banks. According to the
Your cable company. This is one service provider toward which you probably don't feel much loyalty. Instead, you might be sticking with your cable TV company because you feel trapped. A survey by cg42, a business consulting group, found that 53% of cable customers said they would leave their provider if they thought they could. Even if you're in an area with only one cable provider, you likely have other options that might cost less. Check with satellite TV providers, such as Dish Network or
Even if you don't want to switch, let your cable company know that you're shopping around and ask whether it will match a competitor's offer. Be sure to speak with a supervisor, who has more power to make changes to your plan. If you threaten to switch to another provider, you'll likely find that your cable company can offer incentives to stay. I've done this and shaved
Your credit card issuer. For people with credit card debt, being loyal is very expensive, Clements of MagnifyMoney.com says. You've probably heard that if your account is in good standing, you can get an interest rate reduction by calling your company and asking. This is true, Clements says, but the card company will likely cut your rate by just a percentage point or two from, say, 17% to 16% or 15%. But if you switch to another card with a low introductory rate, you could cut your interest rate - at least for a period of time - by 90% or more, he says.
Balance transfers are the best way to get your rate as low as possible, but that requires a commitment to "debt surf" (move from one promo offer to another) until your card is paid off, Clement says. "If you are willing to do that, it is hard to find a cheaper way to pay off your debt," he says. Another alternative is to open a credit card with a credit union, which tends to have low interest rates. For example, Clements says the
Your wireless provider. Wireless companies frequently offer incentives to customers who switch carriers, ranging from bill credits and discounts on new phones to payment of early termination fees charged by other carriers. That's why you should check the Web sites of wireless providers every few months to see what sort of deals they have. My husband and I got a
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Cameron Huddleston is an online editor at Kiplinger's Personal Finance magazine. .