Lately, it seems like just about everything has an extra fee tacked on. While it may be just a few dollars here and there, these added fees can take a bite out of your wallet. Often, we aren’t even aware we are being charged something extra.
Companies can earn a substantial amount of money from hidden and unnecessary fees. In 2022, credit card holders were assessed a record $25.4 billion in fees for late payments, over-limit penalties, cash advances, and other transactional costs. Consumers paid banks over $7.7 billion in overdraft and insufficient fund fees in 2022.
Below we’ve outlined some strategies to avoid hidden fees and keep more of your money.
6 strategies for avoiding the fee frenzy
While you may need to invest some time to avoid hidden and unnecessary fees, the money you can save will be well worth it.
1. Avoiding bank account fees
Many of the fees levied by banks are all too familiar, with most of us getting dinged for overdrafts, falling below account minimums, ATM withdrawals, or having a basic checking account. A recent report by Pew Charitable Trust showed many fees — particularly regarding overdrafts — remain hidden. Consumers are often unaware they agreed in advance to have these charges go through when they don’t have enough money in their account in exchange for paying the overdraft penalty.
- See whether your bank has a mobile app that may allow you to get alerts to tell you when your balance is low.
- Don’t opt in to debit card overdraft protection. Your bank can only charge you an overdraft fee
- Avoid ATM withdrawal fees by using only your bank’s or network machines.
- Consider credit unions or online virtual banks where free checking is more common.
- If you get charged a bank fee, call your bank and request a refund. Your bank will likely refund your fees as a courtesy unless you frequently incur nonsufficient funds and other fees.
- You could be paying excess fees if you have too many idle bank accounts. If you transfer your funds into one bank account and close the others, you could save yourself extra bank fees. You’ll save even more with a no-fee account.
PRO TIP! The only money app you need with personalized tools, tips, and offers to control every money moment in your life.
2. Avoiding credit card fees
As with banks, fee disclosures to customers have improved. Consumers were assessed nearly $14.5 billion in late fees in 2022. Using a credit card wisely keeps fees low.
- Credit card fees can be avoided by shopping for no-fee, lower-interest-rate options.
- Stop over-limit fees by opting out of plans that let you spend beyond your credit limit.
PRO TIP! Building your credit is easier than you think. It starts with knowing and understanding your score, creating goals, and monitoring your credit as you take steps to build it.
3. Avoiding fees when traveling
Airlines put their flag in the ground by charging for checked baggage, and the fees have only expanded from there. Fees for rebooking flights have gone up, and it’s just about impossible to find anything resembling an in-flight meal for free.
- Ask about the baggage fees before you book your flight. Do what you can to limit your luggage to carry-on cases.
- For meals, bring aboard food bought in the terminal or from home.
4. Avoiding cable TV and internet service provider fees
Cable TV providers have built an empire on the bundle, making you pay for channels you may not want to get the ones you do. They’re also happy to pass along charges for cable boxes, routers, modems, DVR services, early termination, and repair services.
- Cord-cutting — completely getting rid of traditional cable TV subscriptions — by consumers is gaining momentum. You might save money by trimming your monthly subscriptions to Netflix or Hulu.
- You should be able to get all of the main network channels like NBC, CBS, and ABC free over the air.
- Buy your cable modem instead of renting one from your internet service provider.
- Periodically call your cable TV or internet service provider and ask for a discount.
5. Avoiding mobile service fees
Just like airlines, the fees for many services — text message overages, internet access, early termination — have shot higher. In addition, many companies entice customers to sign up for plans that leave them with large quantities of unused minutes. You can save money if you’re paying attention to the fine print.
- One easy way to cut phone costs is to not pay for more data than you need. Most people can get by with less than 2 gigabytes per month, especially if they have access to Wi-Fi at home and work.
- When you’re limited to connecting via a cell network, steer clear of data-intensive activities like video and music streaming, fast-action games, and video calls.
- Turn off data roaming when traveling internationally so you don’t end up with roaming charges.
6. Avoiding fees for groceries
This isn’t technically a fee, but it’s definitely hidden. Have you noticed how many consumer products you regularly buy keep getting smaller? Manufacturers can regularly reduce the size of packaging — while keeping prices the same — to keep buyers from chasing lower-cost alternatives.
Best strategy: Read the small print on per-unit prices and buy food in bulk whenever possible.
Keep more of your money by slashing hidden fees
Hidden and unnecessary fees are more than just a nuisance; they can cost you a pretty penny. If you are willing to invest the time and review your monthly bills, you might find ways to cut back on hidden fees. Avoid these unnecessary costs and you’ll hold onto more of your money.
FAQ
Are there any hidden fees when opening a new bank account?
Most banks don’t charge a fee to open a bank account. You could be charged a fee if you order checks or an additional credit or debit card when opening your account. There may also be fees depending on how and where you use your debit card.
How can I avoid paying annual fees for credit cards?
The best way to avoid paying annual fees is to select a credit card that doesn’t charge them. If you have a credit card with a yearly fee, try calling the credit card company before they charge the annual fee to see whether it will waive this.
How can I avoid activation fees when signing up for a mobile service?
You may find one that doesn’t charge activation fees when shopping around for mobile service carriers. You may also avoid activation fees by asking the salesperson whether they have any special deals waiving the fee.
