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Saving money on a health club contract

The ads promise great results at low prices, but picking a health club isn't that easy. In fact, if you don't take into account the hidden costs involved in signing up for a gym membership, it'll be more than your biceps that will feel the burn.

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Generally, when you join a club for 12 or 24 months -- unless you pay for the membership in full -- payments are drafted from your checking account or credit card account each month. Where the problem lies is with the automatic renewal feature of your membership: Typically you must provide written notice 30 days before the end of the contract -- although some clubs offer you the chance to cancel within three days. Otherwise, the membership rolls over to a month-to-month plan.

While most membership agreements clearly explain the rollover policy, it is typically in a point-size so small you need a magnifying glass to read it -- and club members either don't fully read it or understand the agreement. And that's when they feel misled.

Can health clubs automatically renew your membership and continue to deduct money from your account? Yes. Policy Analyst, Phil Telfer, of the North Carolina Attorney General's office points out that health clubs fall under the pre-paid entertainment laws.

No contract can last more than three years, but what these clubs are doing does not violate the statute. As long as the club gives members the right of cancellation and consumers can cancel at any time, no violation occurs.

Another feature that sometimes gets club members into trouble is when they purchase prepaid lifetime memberships. Some gyms have lifetime memberships -- which they will always promote. Unfortunately, these types of memberships are usually for the life of the club, not yours! If the club closes, you're out of luck. In Florida, for example, the law requires most health clubs to register with the Department of Agriculture and Consumer Services and to post a bond for a limited time. This way, if the health club goes out of business, those members who pre-paid will get their money back.

Before you spend money joining a health club, what things should you keep in mind?

  • First of all, don't rush into anything. Any special deals the club is touting "only for today," such as waiving an initiation fee, rarely end in that industry. The longer you resist signing a membership agreement, the more chance you'll have of a reduction in membership costs. If the health club administrator sees you're shopping around or may not join at all, there's a good chance they'll come through.

  • Never sign a membership contract that has finance charges attached to it, because this can be extremely costly over the life of your membership, especially with average annual percentage rates hovering around 18 percent.

  • If you think you may be moving in the near future, find out if you can cancel your membership and any renewal features you have or transfer it to another gym -- all without a penalty. Bally's Fitness Centers will allow you to cancel your membership and forgo the automatic renewal as long as you can prove to them that there is not another Bally's Fitness Center within a 10-mile radius in your new city.

  • What possibilities exist to transfer your membership? Let's say you get a new job and your workout schedule changes. You need morning aerobics classes, only your gym doesn't offer them. Try to get another member to buy your membership if possible so you don't have to keep participating in any automatic renewal program.

  • Look for an "out." You want to find a way you can cancel the contract with no penalty at any time.

  • If you're still not sold on the club, consider a short-term membership. Even if this ends up being more expensive, a pay-as-you-go trial membership allows you to see if you like what they have to offer.

-- Updated: Jan. 21, 2005




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