Being able to switch electric providers can come with numerous benefits, such as lower rates or added features. However, it is important to read the current contract carefully, as homeowners may be charged an early termination fee if they switch to a new provider before the contract ends. It is a good idea to look into this carefully if it applies, as there may be ways to avoid paying the fee or owing the company money after the switch.
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Read the Contract to Find Out the Fee
It is important to read the contract carefully to determine what the contract fee is and how much will need to be paid. The electricity early termination fee can vary from provider to provider and can change over time, so it’s a good idea to get an updated number before making any decisions. Depending on this number it may be a good idea to go ahead and switch anyway or it may be better to wait.
See if the Fee Reduces Over Time
Some providers will have a set early termination fee. It doesn’t matter if the homeowner wants to cancel six months ahead of the contract’s end date or one day early. It’s going to be the same amount. Other providers, though, have a different approach. Some may have a fee that reduces over time, so the closer it is to the end of the contract, the lower the early termination fee will be.
Consider Cash-Back Offers Obtained
Providers who want to attract more customers will often provide cash back for signing a contract with them. This is usually a small amount that may be actual cash or may be a credit on a future bill. The goal is to sign up customers who will stay for the duration of the contract, though, so the provider may require it to be paid back if the homeowner terminates the contract early. It is crucial to read the contract to see if this is the case, as it could be an extra amount on top of the early termination fee.
See If There Are Exceptions
There may be exceptions to the fee that can be used to the homeowner’s advantage. For instance, in most cases, those who are moving will not have to pay an early termination fee. Those who are planning a move may need to provide information about the move to the electricity company to ensure the fee is waived and to help them save money.
Think About Waiting Out the Fee
One way to avoid paying any early termination fees is to wait out the end of the contract. If the early termination fees are high and may cancel out any discounts obtained through switching providers, it’ll be best to go ahead and wait. However, if the benefits outweigh the cost of the fee, it could be a good idea to go ahead and pay the fee to switch.
If you’re planning on switching electricity providers, it’s important to know what your contract says and whether you may be required to pay an early termination fee. Use the information here and what is written in the contract to determine the total fee that would be owed and figure out what needs to be done to make sure everything is paid in full before switching.
