20 Hidden Fees You Had No Idea You Were Paying
You know that, if you're late filing your federal taxes or paying your credit card bill, you'll get slammed with a fee. But there are hidden costs in all sorts of surprising places. Here's how to find them.
Foreign transaction fees
You're on vacation overseas having a good time, and you whip out your credit cards without much thought. Bad idea. While traveling abroad, be extra wary that credit cards add 1 to 3 percent on top of a purchase as a foreign transaction fee. "Avoid this pesky fee by paying with cash or using a credit card that waives the foreign transaction fees," says Natasha Rachel Smith, a personal finance expert with TopCashback.com.
Hotel check-in surprise
Often popular hotels in tourist destinations charge resorts fees that are unavoidable. The fees can range from $10-$30 a night. "This is often a surprise to most guests due to the fee not being included in the price. To avoid a costly surprise during check-in, call your hotel and ask upfront about fees," says Smith.
If you're funding a Qualified Plan like a 401(k), even a seemingly negligible fee that adds up to 1 percent can cost big. "Such a small fee can reduce your retirement balance by 28 percent," says Garrett Gunderson, founder and chief wealth architect at the Wealth Factory. Realize that retirement plan fees include administration charges, fund marketing charges that are known as 12-b-1 fees (marketing fees), legal fees (set-up fees, admin fees), expense ratios (paying for the manager even if it doesn't beat a low or no cost index fund). Forgetting about surprising costs is one of the most common retirement savings mistakes.
Check out your cable provider
Cable TV providers are adding fees to cover their costs—while they say they're holding down their prices in general, says Gunderson. These costs come from carrying certain broadcast networks such as CBS, and for regional sports channels. "In any event, cable companies will almost always renegotiate or lower the costs of Internet service, cable packages, etc., if you call to cancel. For example, I got mine down from $170 a month to $100 by negotiating," says Gunderson.
Examine your cable bill to see what channels you watch, what channels you don't, and where you may be overcharged. Negotiate a package that gives you the channels you watch most. Look at the fees on your bill—for extra boxes, or for your modem. You can sometimes replace the modem you rent from the cable company with one of your own, which will pay for itself in months. Prevent hidden fees by learning all of these personal finance tips you were never taught.
Sneaky hotel fees
Open the mini bar in your room at your own risk. Sure, they may have a list of prices beside the mini bar, but sometimes, just shifting items in the bar can trigger a charge. Ordering extra towels might also cost you. It's a good idea to ask about any fees or charges for stuff in your room before you use or get more.
Keep your eyes on your keys
No doubt when you're on vacation, you're in a happy-go-lucky mood. Don't get too caught up that you lose the keys to your rental car. That fee may be $300 and if you lose your hotel key, it could be $25 or more.
Blindsided by balance transfer fees
It sounds so simple: Transfer the hefty balance on your credit card to a new credit card with a zero percent interest rate. But that opportunity will ding you the hefty surcharge of 4 percent in transfer fees. So be sure it's worth doing and that you can pay off your entire balance during the promotional period, otherwise, you'll owe interest on the remaining balance, undercutting your intended benefit.
"If you use PayPal to shop online, then there's a good chance that at some point you're going incur some sort of monthly fee that is automatically charged to your PayPal account. This is usually the case when you sign up for some sort of online membership or subscription," says Steve Wang, a certified financial planner who runs a career blog. Businesses use this payment system to take advantage of customers who forget to cancel or simply never knew they were signing up for a recurring charge, he says. These fees run for an indefinite amount of time until you take the initiative to cancel them and can slowly eat away at your finances.
As for strategy, he says, "Always check your PayPal payment history. Chances are, if there's something being charged on a weekly or monthly basis that you don't immediately recognize, it's a recurring payment. If you wish to cancel a recurring payment, there's a user page within your PayPal account settings where you can manage all the recurring payments currently active on that account." In addition to PayPal literacy, make sure you know these nine financial planning terms by the time you're 40.
Home sweet home
Home-buyers can expect a ridiculous number of fees at closing, such as inspection fees, title searching fees, survey fees, loan origination fees, and some other seeming frivolous fees. Says Wang, "These usually can't be avoided. At times they can be negotiated though, and you should definitely be aware of the existence of many of these fees that are associated with buying a new house." Here are other surprising costs and fees first-time home buyers need to know about.
Careful with convenience
Prepaid cash cards are easy and can be a good choice for kids on leaving home for the first time. But buyer beware. Says Wang, "Almost all prepaid cards come with some sort of activation fee, swipe fee, or monthly maintenance fee. While they may seem inconsequential at first, these fees can often pile up."
Know, too, there are only a few prepaid cards with no fees. Says Wang, "Only use prepaid cards when you have to, and be sure to read the fine print or do some research online regarding what fees may be potentially involved." If you do have kids—or just want to learn from the smartest—check out the money rules finance experts teach their own kids.