Dont Pay These New Hidden Fees | Reader's Digest

Don’t Pay These New Hidden Fees

Watch out for these sneaky ways that you are nickel-and-dimed.

By Max Alexander from Reader's Digest | June 2007

A few years ago, airlines started charging $5 to book your ticket with a human on the phone (as opposed to using the website); now many have upped that fee to $15 or $20, says Clarkson, the travel industry analyst. Need to change the date of your return? That’s likely $100; a few years ago, $50 was the norm. “It was more of an inconvenience fee before,” she says. “Now it’s a revenue stream.”

Clarkson’s biggest pet peeve is the now ubiquitous fuel surcharge, which airlines began to levy as oil prices shot up. Since fuel is rather essential to flying, consumer advocates wonder why higher energy costs aren’t simply included in the fare. “It’s like buying a book and paying a paper surcharge because the cost of timber is going up,” says Clarkson.

Current laws require airlines to include fuel surcharges in the advertised fares, although some airlines have lobbied the U.S. Department of Transportation to deregulate the ads so they can “unbundle” surcharges. As it is, surcharges are hard to track because airlines change them frequently. Most typically run $20 to $30 per round-trip ticket, but the sky seems to be the limit. On its website, United Airlines says its international flights (including trips to Puerto Rico and the U.S. Virgin Islands) can incur fuel surcharges of “up to $150 per direction of travel, and which are subject to change at United’s discretion, without notice.” Uh, thanks.

Hotels are joining in the fee-for-all, and like everyone else, they’re getting bolder. “Hotel guests expect to pay a ridiculous amount for the macadamia nuts in the mini bar,” says Clarkson, “but they don’t expect to pay to have the mini bar restocked.” Some hotels are charging fees for telephone service even if you don’t use the phone.

I wanted to visit my mom in Arizona. The Omni Tucson National Golf Resort & Spa had a “Net-savvy rate” of just $189 a night. I went to confirm the reservation and — aha! — there was a $12 nightly “resort fee,” which made the room actually cost more than $200 a night (not including taxes).

I called the reservations line for Omni Hotels and asked about the Tucson charge. The guy on the phone seemed stumped. “Well, it’s a resort,” he said finally. “There are two Jacuzzis, two pools, a sauna, a steam room, workout equipment, tennis courts …”

Obviously this was just another way to pile profit onto the back end. I wondered if it was negotiable. “I’ve got a lousy backhand,” I told him. “What say we forget the tennis and call it even?”

“You’ll still have to pay the fee,” he said nervously.

“What if I promise to stay in my room and work on my laptop the whole week?”

“I’m afraid not.”

“Have you ever seen the Alligator Lady? Oh, never mind.”

What You Can Do
Before booking a plane ticket, check the total, including taxes and fees. Make sure your checked luggage is within size and weight limitations (available on airline websites) to avoid extra fees. When making a hotel reservation, inquire about fees, and refuse to pay those for services you won’t use.

Hot Tip
At the rental-car counter, skip the up-front gas fee that allows you to return the vehicle empty. You’ll only end up paying for gas you don’t use.

Break-the-Bank FeesFees used to be levied by banks to discourage bad behavior, like bouncing checks. But fees have become a profit center for the banking industry, accounting for billions of dollars in revenue. Take those checking account overdraft charges, which are at an all-time high, according to Bankrate.com. The average bounced-check fee is a whopping $27.40. That’s a 50-cent increase over the last year.

Even more outrageous are the insane late fees credit card companies charge when you miss your payment deadline. We’re talking an average of $31.37 — up 14 percent from $27.44 in 2002, according to CardData. And credit card issuers are charging the fees with alacrity, often if a payment is late by just a few hours. Last October the Government Accountability Office released a study that criticized the confusing array of fees charged by credit card issuers — from balance transfers to paying by phone to using the card overseas. “There are so many credit card fees and penalties these days that consumers need a scorecard to keep track,” said Sen. Carl Levin (D., Mich.), who requested the study.

What You Can Do
To avoid most banking fees, pay your credit card bill on time and don’t bounce checks. Consider paying electronically so the money is transferred immediately. It also pays to ask: Sometimes banks will waive monthly service charges or penalties if you’re a good customer.

Hot Tip
Forget about interest-bearing checking accounts. They typically require a huge balance ($2,660 on average, says Bankrate) to avoid service fees of around $10 a month, and they pay paltry interest (0.34 percent in the latest Bankrate survey). You’re better off with a free or cheap non-interest checking account, and stashing the extra cash in a money market fund.

If you think there ought to be regulatory laws, dream on. The government is a major player in the sneaky-fee game. With voters revolting against higher taxes, politicians are imposing fees to pay for everything from civic centers to libraries.

Taxes that would never pass muster with voters are instead fobbed off as “fees” on powerless visitors. Thus, a hotel room in Chicago will cost you 15.4 percent in taxes, one of the highest lodging rates in the nation. Likewise, a rental car in Dallas carries a 5 percent fee to finance a stadium, completed in 2001, for the NBA Mavericks.

I like basketball, but it sticks in my craw that when I, a Boston Celtics fan, rent a car in Dallas, I have to subsidize a rival team’s stadium!

Personally, I go along with Clarkson, who says: “I’m a huge proponent of the customer complaint. Don’t just tell the manager; write a letter to the most senior marketing person saying, ‘Your fees are not acceptable and I want a refund, or you will lose me as a customer.’ That puts a lot of hesitation into marketers’ minds when they consider implementing these fees.”

Good advice — which I plan to take with me to the next county fair.