I don’t mind paying one-time fees when there’s a reason. Years ago, gas jumped to $4 per gallon, and pizza restaurants added a delivery fee to the orders. I didn’t like it but I understood it. Of course, now gas is $1.50 per gallon and the $2.00 delivery fee has gone up to almost $5. While there’s not a lot you can do about pizza delivery fees, here are some that are much easier to avoid.
Bank
ATM fees. ATM fees just keep going up – the average now is $4.69. While paying this once in an emergency may make sense, regularly paying almost $5 to access your cash is a waste of money. Consider changing banks if you don’t live or work near the free ATMs offered by your bank. Online banks may offer several free withdrawals per month at any ATM. And you can usually get cash back at the grocery store when you make a purchase.
Checking account fees. Just like the fee for an ATM withdrawal, the fee for a checking account keeps rising. According to MoneyRates, the average fee is just over $14 per month, totaling almost $170 per year. This is your money that the bank is using, yet they are charging you on top of the money they’re making on your deposits. Research free accounts – there are tons of them.
Overdraft fees. Banks may offer you the choice of allowing overdrafts on your account. They will sell you with the line “if you don’t have money in your account the purchase will be declined” unless you opt in. So if you’re using your debit card to purchase a TV and you don’t have the money, you won’t get the TV. But if you don’t have the money, should you buy the TV anyway? These fees can average more than $35. Contact your bank and make sure you’ve opted out.
Paper statement fee. Some banks will send you a paper statement; others will charge you for that service. While this seems petty on the part of the bank, there’s no reason you should pay for a paper copy. Sign up to receive your statement online. Your bank will send you an email when your statement is ready. Download it to a file you keep on your hard drive. (Oh, and balance your checkbook!)
Credit Card
Foreign transaction fees. If you are traveling overseas, make sure you have a card that does not charge foreign transaction fees. You pay this fee – often 3% of the transaction – each time you use your credit card in a foreign country. Yet there are plenty of free credit cards that have no foreign transaction fee. It’s worth it to find one before you travel.
Cash advance fees. There’s no way to get around cash advance fees. You’re not likely to find a credit card that doesn’t charge these. Basically, the minute you get your cash out of the ATM using your credit card, you are charged an upfront fee and interest begins accruing. Don’t use your credit card for cash advances.
Balance transfer fees. Some credit cards with zero-percent interest rates charge fees when you transfer a balance from another card. If you need to move your high-interest-rate card balance to a zero-percent card, make sure you apply for one with no balance transfer fee.
Overage fees. An overage fee occurs when you buy something using a credit card that pushes you over your credit limit. After the economic downturn of 2008, the Credit Card Act severely limited how credit cards can charge these fees. First, the consumer must opt in to allow for overages. If the consumer hasn’t opted in, the transaction that would exceed the card’s limit is rejected. Short story here – don’t opt in.
Annual fee. Annual fees are a waste of money for the vast majority of consumers. Why? Because you can usually find a card offering everything you need for free. However, in certain circumstances they may make sense. For instance, if you travel on one airline every week and check luggage, but checked luggage is free with your credit card (and $50 otherwise), a $95 annual fee makes sense.
Prepaid card fees. Sometimes when your credit is bad or you’re just starting out, a prepaid card is the only way to get credit. When you are researching these cards, look for ones with no monthly or reloading fee.
Airline/Travel
Baggage fees. Most airlines charge for you to check a bag. If you fly one airline regularly, their mileage credit card might be worth the annual fee if you normally check your luggage. However, if you’re planning for your summer vacation, look for flights with airlines that do not charge for checked baggage. Try to travel light and limit yourself to carry-ons. Whatever the case, add in any luggage (and other) fees to the ticket price to have a true apples-to-apples comparison.
Car rental fees. If you’re renting a car, make sure you have unlimited mileage and that you fill up the tank just before you return it. The price rental companies charge for topping off your tank can be almost twice as much as at the corner station. Check your auto or credit card insurance before arriving at the rental car office; most offer insurance up to a certain dollar amount for rental cars that you drive. Make sure the driver is the person on the card though. And don’t sign up for GPS or other add-ons that you don’t need.
Hotel fees. Know the fees going in and call to negotiate any you won’t need. If you’re not driving there’s no reason to pay for a parking space. If the hotel still charges for Wi-fi access, try to find another nearby that won’t charge you.
Miscellaneous
Shipping fees. While the amount you must spend for free shipping has gone down recently, most retailers still require at least $25. Unless you need that widget immediately, combine your purchases so that you don’t have to pay for shipping. If you really don’t need anything else, see if there’s something on your grocery list that could be ordered online. Or maybe stock up on light bulbs or soap to meet the free shipping limit.
Online stores are masters as giving you a sale price just below the free shipping limit. If you like the shirt, find something else that you need for a couple of bucks. Don’t be tempted to buy a higher priced item just for the free shipping.
Credit report fees. Every year, you get a free copy of your credit report from each of the three credit bureaus. In some states, you get more than one. If you want to keep an eye on your credit report throughout the year, consider ordering it from one credit bureau in the spring, one in summer, and the other in the fall.
Cable equipment fees. Cable companies love charging you to rent their equipment. Even if it’s only $10 per month for a modem, research modems that work with their systems and price them. If you can pay off the cost of your modem before the end of your cable contract, it’s worth buying your own.
Late Fees
Late fees are so egregious that they get their own category. If you are late paying most bills, you will incur a fee. Not only that, many companies report late payments to the credit bureaus, which can tank your credit score. Paying late fees month after month is a sign that you have problems managing your money. The way to avoid them is obvious – make your payments on time. But if you’re having issues finding money to pay those bills, consider using a budget or other ways to get out of debt.
Fees are easy to ignore. Paying a couple of bucks here or there doesn’t really seem that big a deal. But over time they can add up to a substantial amount of money. And honestly – even if they are small, do you really want to be paying these fees when you don’t have to?