Editorial Policy

Don’t let a gym membership ruin your financial fitness

Allie Johnson

January 10, 2014

Many consumers join a gym hoping to shed pounds but instead end up losing only dollars. With contracts that can trap you into a monthly payment and salespeople more than eager to sign you up for one, protecting your best interests can take more energy than that first post-holiday workout.

I know this, yet I’m still considering signing up for a gym membership this year. I’ve been doing my research and trying to make a good decision — and I’m keeping these four things in mind before signing anything:

1. It’s important to shop around. If you go into a gym to ask about memberships, a salesperson might pressure you to sign up that day, possibly by touting a limited-time deal. But take your time and comparison shop, points out Steve Kamb on his blog NerdFitness. That way, you can think about whether a gym membership is for you and, if it is, pick the right gym at the right price. NerdFitness.com also recommends trying to get a free guest pass at any gym you’re considering and actually going a few times. Then try another gym, and so on.

2. Having an “out” could save you money. Because I’m not a regular gym-goer now (my idea of exercise is a long walk with the dog), I’ll only join a gym that allows me to cancel when I want to. If you do sign a contract for a certain time frame, make it a short one — a year max. Gyms will try to convince you to sign up for several years in exchange for a lower monthly rate. But face it: Even if you’re sure you won’t trade the treadmill for the TV in a month, who knows what you’ll be doing that far in the future? Maybe you’ll decide you don’t like the gym or will move, but not far enough to get out of the contract. Many gym contracts specify that moving is only an excuse if you end up a certain number of miles from one of its locations. With large chains that have many locations, there’s practically no escape, even if the “closest” gym is farther than you’d care to drive every day after work.

3. Cancellation might not be easy, quick or cheap. Even gyms that let you cancel whenever you want will likely have cancellation rules. For example, the YMCA near my house that I’m considering requires cancellation in writing 30 days before you want your membership to end. If you don’t time your cancellation exactly right, you could be on the hook for an extra month. If a salesperson agrees to more lenient terms, get it in writing. Cassie, the blogger who writes the debt blog Tales from the Trenches, got a verbal promise that she could cancel her gym membership any time, then got surprised by a huge hassle and a $149 cancellation fee.

4. A gym membership can mess up your finances — and credit. Different gyms collect payment in different ways. Some — such as the Y I’m considering — require you to hand over your bank account information and let them do a monthly automatic debit. If a debit overdraws your checking account or puts your credit card over the limit, you could get hit with fees from you bank — or have the transaction declined and get hit with fees by the gym.

Even if you pay cash upfront to get a better rate, you might still rack up charges if you unwittingly run afoul of a cancellation policy. For example, the anonymous blogger behind the personal finance blog Girl Meets Debt paid cash upfront for an 18-month membership. After she thought her membership had ended, she was told she owed $160 more because she didn’t give two months’ written notice that she was leaving the gym. The gym claimed to have “auto renewed” her membership, said she was four months late on payments, started calling twice a day and threatened to send the account to collections (it ultimately didn’t).

If you end up in a contract that you can no longer afford (or simply no longer want to keep), nonpayment could also put your credit on the line. If you try to wiggle out by canceling the card or closing the account associated with payments, your account will go into collections — and collectors can sue you. Both collection accounts and judgments your collectors win against you will cause credit damage.

Committing to a gym membership can be an excellent way to keep you motivated in your fitness goals. But, because the gym’s salespeople have goals of their own to meet, make sure you know your contract inside out before you sign.