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    15 most hated fees

    June 10, 2010

    Stand up to the pesky charges -- from checked-bag costs to retirement plan expenses -- that bug you the most.

    1. Being charged for not charging

    What you're mad about: A few credit card issuers have started levying annual fees on less active users to encourage them to spend. Citibank, for example, slaps a $60 fee on certain cardholders unless they charge $2,400 within a year. (Spokesman Samuel Wang blames it on the "increasing costs of doing business.") And US Bank Visa Platinum dings you $40 if you don't use your card during a 12-month period.

    How to fight back: Happily, such fees are the exception, not the rule. So vote with your feet, says Curtis Arnold of CardRatings.com. Look into switching to a card issued by a credit union (findacreditunion.com). Credit unions typically charge fewer fees than big banks do.

    2. Parting with cash to close your HELOC

    What you're mad about: Lenders have been quick to freeze or slash borrowers' home-equity lines of credit in the past few years. But if you dare close down a line yourself within the first three to four years of opening it, you'll pay from $250 to $700. Two-thirds of all lenders charge such fees, says Keith Gumbinger of HSH. He says it's because the creditor has to absorb certain closing costs.

    How to fight back: Keep the line open, even if you don't plan to use it. If you must close the line -- say, because you want to refinance your mortgage -- ask your lender to waive the fee. If the same lender has your HELOC and your new mortgage, it may comply.

    3. Forking over new charges for overdrafts

    What you're mad about: Often banks allow you to link a savings account to your checking account so that funds can be pulled from the former if you overdraw the latter. This workaround can help you avoid nonsufficient-funds fees, now averaging $30, according to Bankrate.com. But many banks have found a workaround for your workaround: They'll charge you $10 to $20 every time they transfer your money between the accounts. Meanwhile, it costs the bank next to nothing to move the funds, says Bryan Derman of Glenbrook Partners, a financial services consulting firm. "They're charging you for what's essentially an automatic transfer!" echoes reader Zoe Dowling, whose bank (Wells Fargo) levies the fee.

    How to fight back: Sign up on your bank's website or Mint.com for e-mail or text-message alerts that tell you when your checking account balance is below a certain amount. That way, you can make transfers for free yourself before an overdraft is triggered.

    4. Paying to use your frequent-flier miles

    What you're mad about: Can it really be called "reward travel" if you have to pay for the reward? Apparently. To redeem your miles for any flight on US Airways, you must pay a $25 to $50 fee. ("It's an effort to recoup a portion of the overhead of the program," says spokesman Todd Lehmacher.) American, United, and Continental, among others, usually make you pony up $50 to $500 one way to use miles for upgrades.

    How to fight back: Stick to one airline, and try to achieve gold or platinum status (which generally involves flying at least 25,000 miles a year). That way you'll escape redemption fees, says Randy Peterson of WebFlyer.com. Don't travel that much? Consider a credit card that lets you earn miles -- specifically "elite qualifying miles" -- such as Platinum Delta SkyMiles American Express (800-223-2670). Just be sure to weigh the annual fee against the benefit you'll get.

    5. Laying out too much in annuity fees

    6. Paying to get credit rewards reinstated

    What you're mad about: Have a reward card? Some issuers have a creative new way of punishing you for paying late: They take away the points you earned in that billing cycle -- and make you fork over money to get them back. Diner's Club charges a $15 reinstatement fee; American Express, $29. Some other issuers, including Capital One, won't let you get your points back for any price.

    How to fight back: Schedule automatic payments online for at least the minimum amount due, advises Arnold. That way you'll never be late.

    7. Forking over for your checking

    What you're mad about: As if it's not bad enough that banks are paying next to nothing to use your savings -- the going yield is 0.2% -- they're charging you more for checking too. The average monthly cost of an interest-bearing checking account was $12.55 in 2009 vs. $11.97 in 2008, reports Bankrate.com. Some banks have minimum balances you can meet to avoid "maintenance" fees, but the balances have gone up -- to $3,400, on average, for interest checking. So it's harder to sidestep the fee. "Does it really cost the bank $15 if my balance goes from $100 to $99.99?!" asks reader Roy Kinoshita.

    How to fight back: Free checking will all but disappear at big banks in coming years, predicts Greg McBride of Bankrate.com. "But it will remain the hallmark of community banks, online banks, and credit unions." Consider one of them. If you want to stick with a big bank, ask about deals for employees of your company; sometimes minimum-balance requirements are nixed if you have direct deposit. Finally, get regular checking rather than the interest-bearing kind; fees are much lower ($1.77 a month, on average).

    8. Paying to shut a brokerage account or IRA

    9. Helping fund mutual fund marketing

    10. Handing over big bucks to check baggage

    What you're mad about: With airlines charging for everything from blankets and pillows (American, Allegiant, JetBlue) to seat reservations (Spirit, Airtran, British Airways), it's a wonder the burned coffee is still free. Your biggest complaint about the airlines, however, is the ever-increasing luggage fees. Only JetBlue and Southwest don't charge to check your first bag. At other airlines, the fees on domestic flights range from $15 to $45 for your first checked bag, $25 to $35 for your second. (You may pay even more if you check the bags at the airport instead of online.) For a family of four on a roundtrip, those fees can easily total $200. To add insult to injury: Spirit announced that on Aug. 1 it will begin charging $20 to $45 for each carryon.

    How to fight back: If you can't fly a baggage-fee-free airline, aim for elite status on the airline you use most often. That gets you at least one free checked bag per flight. Or simply pack lightly enough that you can avoid checking altogether. You'll need a soft-sided carryon bag with exterior dimensions totaling no more than 45 inches; length should be no more than 21 inches, says Doug Dyment, founder of the website OneBag.com.

    11. Plunking down to hang up on your cell carrier

    What you're mad about: Agreeing to a cellphone contract is sort of like signing over your soul to the devil: You know there will be hell to pay if you break your end of the deal. In this case you'll owe $200 to $350. Such fees usually subsidize the cost of the handset you bought at a low price, says Bob Sullivan, author of Stop Getting Ripped Off.

    How to fight back: Try to talk your way out of the fee, mentioning examples of poor service you've received (keep records and cite them). Customer rep won't budge? If you can stand it, stick with the carrier a while longer. Termination fees are generally pro-rated, so the longer you hold out, the less you'll pay. Next time consider a prepaid phone, which doesn't require a contract. It's generally a good deal if you use it less than 400 minutes a month during peak hours, says Sullivan.

    12. Paying the price when a fund balance dips

    13. Giving your cash away at the ATM

    What you're mad about: The cost of using an ATM that doesn't belong to your bank just keeps going up and up. You'll pay one charge to your own bank (average: $1.32) and another to the bank whose ATM you're using (average: $2.22). Big banks tend to charge more than smaller ones.

    How to fight back: Some major banks, including Bank of America, Chase, and Wells Fargo, have smartphone apps that help you locate ATMs on the go. Use them. Have an iPhone? Download the free ATM Hunter, which finds locations for thousands of banks. If you can't be bothered to go out of your way for the right machine, choose a checking account from an online bank that refunds ATM charges. Charles Schwab stands out: Unlike some other online banks, it doesn't impose a limit on how many fee-free transactions a month you can make.

    14. Coughing up to chat with a human being

    What you're mad about: Time was, the biggest obstacle in reaching a live customer service rep was getting through an automated phone system. Now many businesses -- from airlines to credit card companies to computer manufacturers -- have added another hurdle, in the form of a fee. For example, you'll pay $5 to order a pay-per-view movie from DirecTV by phone; HSBC requires you to pay $15 to make a credit card payment with a live agent. Especially when you're already shelling out money for something, "to pay to talk to a human is a raw deal," says Doug Heller of Consumer Watchdog, a nonprofit advocacy group.

    How to fight back: First try to do your business online, which is what firms want you to do anyway. If that doesn't work, make the call. "The first tier or two of customer service isn't going to be empowered to relieve you of the fees," Heller says. So ask for a manager. Make a reasoned argument for why you need assistance. Note that you are a good customer who either is spending a lot of money (on a plane ticket, for example) or pays the company each and every month (for cable TV, say).

    15. Shelling out big bucks on retirement plans

    Filed Chapter 7 July 2010
    Attended 341 September 2010
    Discharged November 2010 Closed November 2010

    #2
    You forgot the "convenience fee" just for making a payment! One of my insurance companies charges me a $5.00 convenience fee to pay the bill and it doesn't matter if it is online or over the phone, or by mail. The only reason I put up with it is because my premium keeps dropping, and they are still cheaper - even with the fee - than merging policies with my other insurance.

    State vehicle registrations, etc., and for that matter, just about any state service that requires a payment, also tacks on a "convenience fee" - - it is $1.00 to pay by mail or in person and $2.00 to pay online!

    Comment


      #3
      Originally posted by tigergem View Post
      You forgot the "convenience fee" just for making a payment! One of my insurance companies charges me a $5.00 convenience fee to pay the bill and it doesn't matter if it is online or over the phone, or by mail. The only reason I put up with it is because my premium keeps dropping, and they are still cheaper - even with the fee - than merging policies with my other insurance.

      State vehicle registrations, etc., and for that matter, just about any state service that requires a payment, also tacks on a "convenience fee" - - it is $1.00 to pay by mail or in person and $2.00 to pay online!

      So how would you get around the convenience fee at your insurance? Walk in the office and hand them cash?

      Also, my town's convenience fee for paying online only is 2% of the amount of the bill. Not bad if you're dealing with excise taxes but when you're talking about a quarter of the property taxes is close to $20 to pay online, multiply that by 4! Luckily paying by check either by mail or it person are still free. A lot of companies seem to be using convenience fees now though if you don't have auto transfers set up.

      The credit card companies are charging businesses in order for them to make a credit card transaction, the businesses are trying to recoup their losses. Our town for example was spending $150,000 a quarter for credit card fees!
      Still learning all of this, but glad I've found this site! Thank you all for your advice and patience!

      Comment


        #4
        Originally posted by HMT View Post
        So how would you get around the convenience fee at your insurance? Walk in the office and hand them cash?
        Nope. Actually they aren't local, so that wouldn't really be possible. They said they would charge "less of a fee" (I think $4 instead of $5) if I gave them my checking account number for a direct debit. But my rule is NOBODY gets my checking account number. Ever. For any reason.

        Comment


          #5
          3. Forking over new charges for overdrafts

          What you're mad about: Often banks allow you to link a savings account to your checking account so that funds can be pulled from the former if you overdraw the latter. This workaround can help you avoid nonsufficient-funds fees, now averaging $30, according to Bankrate.com. But many banks have found a workaround for your workaround: They'll charge you $10 to $20 every time they transfer your money between the accounts. Meanwhile, it costs the bank next to nothing to move the funds, says Bryan Derman of Glenbrook Partners, a financial services consulting firm. "They're charging you for what's essentially an automatic transfer!" echoes reader Zoe Dowling, whose bank (Wells Fargo) levies the fee.


          OH yeah I'm not too happy about this one!!! Seriously...???? Here's the real fun...Wells Fart-o totes off their little save as you go plan as a benefit....here's the plan...they transfer a few bucks here and there into your savings...but just in case, it's linked to your checking account so you don't have to pay any overdraft fees....sure....10 bucks is better than 34.95 but SERIOUSLY???? They just took 10 bucks of MY money to transfer 2 measy DOLLARS into my account!!!........

          Comment


            #6
            Yeah, my bank would charge that fee too if I were to allow that to happen. When I opened new accounts, I unlinked them for that purpose. They keep trying to sell me on it, but I keep declining it. It costs NOTHING for me double check my balance before I leave the house to make sure I don't overdraw it, or transfer funds myself if I have to. Even while I am out, I can do that over the phone BEFORE I make a transaction. Sometimes you have to stop and think before you swipe that card.

            Comment


              #7
              Originally posted by tigergem View Post
              You forgot the "convenience fee" just for making a payment! One of my insurance companies charges me a $5.00 convenience fee to pay the bill and it doesn't matter if it is online or over the phone, or by mail.
              My insurance company does this too. If I don't pay the entire premium in full with one payment, they allow me to make monthly payments, but charge me an increased total amount, and an additional $5.00 monthly convenience fee.
              Filed Chapter 7 July 2010
              Attended 341 September 2010
              Discharged November 2010 Closed November 2010

              Comment


                #8
                Originally posted by keepinitreal View Post
                My insurance company does this too. If I don't pay the entire premium in full with one payment, they allow me to make monthly payments, but charge me an increased total amount, and an additional $5.00 monthly convenience fee.
                Somewhere... I have no idea where or when... somebody suggested them sending them an invoice for $6.00 per month as the customer's fee for paying the bill, under the same premise and policy they use to assess the convenience fee. The person who suggested it said they did so successfully, I might add. I haven't tried it. But I might lol.

                Comment


                  #9
                  Originally posted by tigergem View Post
                  Yeah, my bank would charge that fee too if I were to allow that to happen. When I opened new accounts, I unlinked them for that purpose. They keep trying to sell me on it, but I keep declining it. It costs NOTHING for me double check my balance before I leave the house to make sure I don't overdraw it, or transfer funds myself if I have to. Even while I am out, I can do that over the phone BEFORE I make a transaction. Sometimes you have to stop and think before you swipe that card.
                  Yeah...lesson learned....this is the first time and it will be the LAST time. I was traveling on my motorcycle in a town that had one Wells ATM - which was out of order....and needed gas and a beverage before I dehydrated. I knew that if the money wasn't in checking there was a few hundred in savings....now I just know to haul my netbook along too....

                  Comment


                    #10
                    Have to stick up for the airlines on this one. Consider 25 bucks for a bag the price you pay for really cheap seats...that 200-300 bucks you paid for the trip to Orlando you take every three years doesn't begin to put a dent in fuel and maintenance costs. Of course, if the government gets their way with overbooking "fines" because inconvenienced passengers think that they should be put up at the Ritz Carlton and eat at Ruth Chris when they get bumped (many times it is their own fault), prices for tickets will shoot back to the levels of regulated days. Bags may be free but flights will be unaffordable for most. And airlines will be profitable again.

                    Elite is the way to go...the airlines recognize you as one who is helping to pay the bills. Ditto for those who fly first class. First class passengers get the same bennies as elites. Those who hold the branded credit cards also get complimentary services.
                    First consult: You go now, no CH 7 for you. You spent entire buffet. 13 has a 95 percent payback. (Owwwch) On to next consult....

                    Comment

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