Arrow-right Camera



TUESDAY, AUG. 12, 2008

TiVo. Netflix. Satellite radio. “World of Warcraft.” The iPhone. The BlackBerry. Flickr. Amazon Prime. The list of digital services and gadgets keeps growing.

There’s just one catch: Much of today’s technology comes with subscription fees that might not seem like a lot individually, but can add up to hundreds of dollars in new expenses.

While subscribers aren’t thrilled by the budget-busting potential of the digital fees, they tend to think of them as the new utilities of the 21st century.

Just as people in the first half of the 20th century got used to paying monthly bills for heat, lights and water, today’s tech-savvy citizens are paying new bills for digital services that enhance their lives.

Chappaqua, N.Y., native Jordan Edelson, 23, has a BlackBerry from AT&T, a wireless Internet card for his laptop from Verizon, satellite radio and a data backup plan from Dell – all with monthly fees adding up to more than $200. And all are services Edelson says he doesn’t want to live without.

“It’s not even an optional cost. It’s the cost of my lifestyle. It’s become more acceptable,” says Edelson, who started a company that broadcasts video game tournaments. “Kids are using cell phones at a very young age, and learning about the fees associated with them.”

James Van Dyke, an expert in payments and financial services research at Javelin Strategy & Research in Pleasanton, Calif., says none of today’s digital services would thrive if it weren’t for the ability of consumers to pay the fees automatically through credit or debit cards.

Van Dyke calls it the “set it and forget it” model.

“The way we’re moving money is changing,” he says. “With just a few keystrokes, we can not only move money from one place to another, but set it up automatically and forget about it.”

More than two-thirds of U.S. households pay some recurring bills automatically, according to MasterCard International, of Purchase, N.Y.

About 38 percent of households link the payments automatically to a credit card, while 31 percent link them to a debit card.

From wire reports


Click here to comment on this story »