How to reduce hidden fees

Created date

January 15th, 2020

Sometimes, the biggest budget busters can be the things you don’t even know you’re spending money on—like hidden or overlooked fees that add up over the course of a year. From air travel to banking to concert tickets, it seems hidden fees are lurking everywhere. 

In fact, a 2018 Consumer Reports survey found that 85% of adults had discovered an unexpected or hidden fee in the past two years. Telecommunications providers were the biggest offender, with 69% of survey respondents who had used that service in the past two years reporting a hidden fee. Live entertainment or sporting events as well as electric and gas bills also generated a lot of unexpected charges, coming in at 44% and 41%, respectively. And hidden fees also turn up in places you might not expect, such as investment services, where 24% of people experienced an unexpected fee. 

But the good news is that you may be able to reduce the hidden fees you pay if you’re willing to put in some effort. In fact, the Consumer Reports survey found that three in ten people fought hidden fees—and two-thirds of those were able to get the charges refunded. Here are five common hidden fees you may encounter and advice on how to avoid them.

1. Annual credit card fees. Sometimes, cards with annual fees offer rewards that justify the cost. But if that’s not the case with your card, it may be worth a call to the company. In fact, a 2018 CreditCards.com survey (creditcards.com/credit-card-news/credit-card-fee-waiver.php) found that 70% of credit card holders who simply asked got their annual fees waived or lowered. 

2. Currency conversion fees. International travel is a high priority for many retirees, but you want to spend your hard-earned savings on memorable experiences, not pesky fees. If you’re traveling overseas, make sure you pack a credit card that doesn’t charge foreign transaction fees, such as Capital One or Discover.

3. Airline baggage fees. Baggage fees generate billions of dollars of revenue for airlines every year. But you can avoid them if you plan ahead.  If you’re a frequent flyer, enroll in your preferred airline’s loyalty program—baggage fees are often waived for elite members. You can also get free checked baggage with certain airline credit cards. NerdWallet recently compiled a list of the top cards that offer free checked bags (nerdwallet.com/blog/credit-cards/airline-credit-cards-free-checked-bags), including Citi/AAdvantage Platinum Select World Elite Mastercard and United Club Card.

4. Cable and internet service fees. Many cable and internet providers lure new customers with low-cost promotions. The problem is that after the first year, the monthly price for the same package can increase significantly. Keep your costs down by calling your provider to see if another promotion is available—or consider switching providers to take advantage of another new customer deal. 

5. Banking fees. The last thing you want to do is whittle away your bank account balance by paying hidden fees. Banks can charge more than $10 a month for monthly maintenance fees, but you can often avoid these if you maintain a certain balance or have a monthly direct deposit. You can avoid paper statement fees by opting to receive statements via email—which will also reduce the amount of paper clutter that makes its way into your home.

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