Prepaid Electric Companies and The Evils Thereof

by Donny on May 9, 2012

So why are prepaid electric companies evil and for that matter why are payday loans, cash advance stores, and unsecured credit card companies evil also?

For some even the rental furniture stores like Aarons furniture leasing is considered of the devil. Many people simply don’t get it as to why people would have such hatred and disdain for these companies.

It is very simple really…you see if Aarons is charging someone $5 a month to lease a lamp but that person only makes a $500 a month that $5 a month is a lot of money for that person.

For that guy who makes $500 a month and has an unsecured credit card he is paying off that has a 22% interest rate where he only makes minimum payments on of $50 a month it begins to add up.

Before you know it $200 – $300 in payday loans, credit card bills, and rental furniture has bit into this guys income enough to the point he must start borrowing money from family and friends.

Now in America we have food stamps so at this point the guy still may be in government housing and have food stamps for basic food needs.

Now when it comes time to turn on the electricity at the government housing he can either ask for government assistance with help in paying the deposit or make quick work of it by going with a prepaid electric company.

So how are prepaid electric companies lumped in with the evils of Payday loan companies and the like?

Well with prepaid electricity you often pay an estimate in advance on what the company believes you will owe them in electric service charges.

As of 2012 things in Texas are much more promising for prepaid electricity because the usage is calculated accurately in real time and sent over the air waves.

This means instead of relying on the evils of false estimates a real recording and charging towards actual electric usage can occur.

In the past some fly by night prepaid electric companies would over-estimate, take your prepayments, eventually go out of business and keep your over payments and your last prepayment.

To close your doors and take your money is truly evil but I must tell you not all prepaid companies do this.

A couple things to pay attention to when deciding on a prepay electric company are:

  • How professional the website looks like.
  • How long have they been around
  • Are they clear about the charges or rate you will pay?
  • Do they offer a fixed rate offer
  • Do they display a customer facts label prior to signing up with them?

In summary these businesses have been complained about because some think they prey on the poor and needy people that cannot afford to rent a lamp monthly or buy prepaid electricity at inflated prices. In reality these companies are nothing more then a cheaper more effective banking alternative. I remember several times not paying close attention to my bank account, buying a snickers bar at a gas station and being charged a $35 overdraft penalty by Bank of America for a $1.50 purchase is a 2333% interest rate. If you think about the alternative to traditional electric companies asking you for a large deposit that you could never pay the prepaid electric company is really offering a cheap no hassle way of signing up quick, often with a competitive electricity price and you don’t to fork over rent and food money as a deposit.

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