We tend to pay attention every time there is some type of tax increase, whether it is a sales tax or our property taxes. Yet fees can eat away at our monthly budgets and leave us wondering where our money went. Many times you hear people talk about hidden fees, but they are not really hidden but just decided not to read the fine print. Here are 10 unnecessary fees that cut into your budget to check out and see which ones apply to your personal situation. You might have to go get your bills and see if there are any surprises that you missed.
1. Rental fees on digital equipment
If you are renting the modem from your Internet service provider, the chances are you are spending money without knowing it. This is one of those situations where spending $60 now will save you a couple of hundred over the course of a year if you just buy your own.
2. Fees on credit card usage
To start, open up your wallet and see how many credit cards you are carrying. The average American has at least 8. For every payment you make that is past the due date you are likely to incur at least a $20 late fee. If you are late on one card a month, at the end of the year you will have spent $240 on late fees alone. Add to that money lost the extra interest you will have paid on the unpaid money. The simplest way to avoid these fees is to pay your monthly bill on or before the due date. What actually hurts the most is when the $20 late fee you are charged is on an account that has a balance of less than $19. It pays to pay on time.
3. Fees on credit reports
You can check your credit report from the 3 major credit reporting agencies (Experian, Equifax, and Transunion) once a year for free. That means you can check it every 4 months using a different agency. Changes to your credit score usually take a couple of months to actually appear, so using this system you’ll have a good handle on your credit report and credit score. If you are someone who needs a regular credit report check you may be able to get one through your bank at no cost. Unless you have a very good reason, there is no need to pay a fee to get your credit reports and scores.
4. Bank fees
The most common bank fee that shakes the foundation of a budget is the overdraft fee. Banks are happy to allow you to draw unavailable funds from your checking account because they make a ton of money every time either your math is bad or you forget to make a deposit. Some banks allow you to connect your checking account to their credit card as a way to cover your overdrafts, but if your credit line is exhausted you might end up paying a bank fee times 2. Then there is the failure-to-make-the-minimum-number-of-transactions fee. Banks may charge you a fee if you don’t use your debit card enough in a month or maintain a minimum balance in your checking account. At $6 a month that can cost you $100 a year or more. You need to check not only the number of transactions required, but also the amount of the transactions. Many banks require a minimum of a $1 purchase for it to be counted.
5. ATM fees
Not all ATM fees are bank fees. But using an ATM that is not part of your bank’s network will cost you a lot. A Bankrate.com study showed that the average amount you will be charged for using an out of network ATM is $4.69 per transaction. One transaction per week adds up to more than $200 a year just to get your hands on your money. Keep your ATM use in-network. If you have to use an out-of-network ATM withdraw as much as is reasonably possible.
6. Fees to transfer or send money
Not having a checking account will almost guarantee you will be paying more fees than the average person. The problem is similar to the ATM fees – you need to get access to your money to pay bills or just get cash. Even sending or transferring money between bank accounts from two different banks can incur a fee. PayPal is a solid option to avoid the fees, but you have to be willing to explore the world of non-traditional banking.
7. Library fines
You’re kidding, right? This is one to pay attention to if you have children. The problem isn’t the amount of the fee but forgetting to return the books. One book left under a pile of stuff that you pay attention to once a week can cost you. If it gets to the point where it is cheaper to pay the library to get a new book rather than pay the fine, you know you have big problems. Organization is the key to reducing your library fees to a bare minimum. Kids will be kids, but gain come control over the situation lest you find that the weekly trip to Mickey D’s will have to be cancelled due to library fee payments.
8. Investment account fees
Fees for investments are generally a part of the process, so while you want to minimize these fees you aren’t likely to avoid them altogether. One problem is when the investment account you are dealing with is a retirement account because you will in effect be taking money away from your retirement. Load fees on mutual funds are among the most commonly overlooked fee that can cost you thousands over time. Company 401(k) fees are notorious for reducing a retirement plan’s value.
9. Foreign transaction fees
For those who travel overseas regularly you know about the foreign transaction fees for using your credit card or withdrawing cash from a foreign ATM. Frequent overseas travelers need to check the rate on their credit cards before using it. Consider having a credit card specifically for overseas travel that has a very low or no foreign transaction fee.
10. The 100 and 1 airline fees
If you travel, it is virtually impossible to avoid paying some type of airline fee. The goal is to reduce the amount as much as possible. Book online instead of making reservations by phone, choose what you will be taking with you on a trip to minimize baggage fees, and carefully plan your trip to avoid ticket change fees.