Consumer Reports calls it “fee-flation.” “Americans are being slammed with hidden fees from almost every direction, forcing us to pay more for goods and services than we budgeted for,” the not-for-profit organization observes. “Fees lurk in our cable and mobile phone bills; are tacked onto airfares, hotel room rates, and car rentals; and are quietly levied on our checking accounts—to name just a handful.”
Although any individual fee may not seem to be much, the fees add up. It is estimated that Americans last year forked over $64 billion in junk fees. That works out to an average of $500 per household.
Many of these sneaky fees are avoidable if you know where to look and if you have some fee workarounds. Here are a few tips to put more money back into your pocket.
Pass up Unnecessary Insurance and Extended Warranties
“Retailers frequently upsell extended warranties, but in many cases, these provide minimal additional value,” Kiplinger.com reports. “Verify whether the manufacturer’s warranty already provides sufficient coverage and review insurance policies so you’re not overpaying for unnecessary coverage.”
Just Say No to Some TV and Broadband Fees
Cable, internet, and satellite television bills are jam packed with fees. To be sure, some fees are mandated by the government, but you may also be paying for company-imposed fees which add up. Providers regularly advertise low monthly base rates while charging you more when all the fees are piled on.
To beat this kind of “fee-flation”, Consumer Reports recommends that you “call the company and threaten to cancel your service if it doesn’t drop the company-imposed fees. If that doesn’t work, keep in mind that millions of American households have ‘cut the cord,’ opting to get their video programing from an internet streaming service such as Fubo, an over-the-air digital antenna, or both, rather than via traditional cable services.”
Be on the Lookout for Phone Bill Cramming.
Cramming is the illegal act of adding unauthorized service charges without your knowledge or approval. The Better Business Bureau notes that “less-than-scrupulous companies add small charges to your bill and describe them with generic terms, such as service fee, voicemail, or other fees…hoping a few dollars here and there will go unnoticed. Many times, they do. In fact, the Federal Communications Commission estimates that cramming has harmed tens of thousands of American households and recently the Federal Trade Commission sent $5 million in refunds to people who lost money to cramming.” To protect your wallet, “thoroughly review your phone bill each month. Reach out to your service provider if you notice any charges you are unsure about.”
Pay for the Car, not the Doc Fee
If you're buying a car, the dealership may insist that you pay an add-on charge to process the paperwork. This is called a document fee, also known as a "doc fee” U.S. News & World Report
says you should “ask your dealership to [eliminate or] lower the fee and see what happens, or even better, check your state's Department of Motor Vehicles website to see if it limits the document fee. If your state has a cap on the fee and your dealer is charging more, consider buying elsewhere. If there is no limit, find out what local dealers are charging for doc fees and ask your dealer to match that.”
Don’t Underpay Your Taxes
Yes, even federal and state governments are in the junk fee business. If you underpay your estimated taxes, you could be walloped with a hefty IRS fee. FidelityInvestments.com suggests that “if you’re self-employed, you might need to beef up your quarterly estimated tax payments. Or you might be able to reduce your tax bill by recalculating your tax withholding. A tax pro can help you sort out the details to avoid penalties in the future.”
Use A Travel Agent to Access Cheaper Flights and Free Perks
AARP Magazine advises using a travel agent for booking flights especially for multi-leg journeys, family reunions or international flights. Travel agents “can spare you the headaches of trying to game the system alone. [Because they] book through professional software systems [they] can see cheaper fares and bundled perks the average traveler may not be able to, such as tickets that include a checked bag or free seat selection. Travel agents also know how to avoid ‘drip pricing,’ where airlines promote seemingly rock-bottom fares that balloon at checkout. And, because travel agencies often buy airfare in bulk, they can sometimes secure fee waivers, rebooking flexibility or seat upgrades that individual travelers can’t.”
