10 Useless Fees & Tips to Stop Wasting Money

Pointless charges can add up quickly and if you aren’t careful, you will end up wasting a big chunk of change. In fact, FeeX.com, a website offering fee analysis to consumers, recently revealed that Americans spend an average of$155,000 in useless fees over their lifetime. According to the claim, most of these fees are charged by banks, financial institutions and investment firms.

Paying the equivalent of the price of a home in fees is a mind-blowing prospect. Considering how many fees there are these days, it’s understandable how this can add up quickly. To manage your money better, review these 10 common fees and how to avoid them.

1. Late Payments
Late payment fees (or penalties) are not just burdensome on your budget, but they negatively affect your credit, too. Late charges on credit cards cost upwards of $35, and often bump you up to the “penalty APR” of nearly 30 percent. If you find yourself paying late fees frequently, you likely have a hole in your budget that needs to be filled. Review your spending and start cutting out the non-essentials. If you’re paycheck doesn’t cover your lifestyle, cultivate a side hustle to pull in the extra money you need to stay on top of payments.

2. Overdraft
You forget about a pending transaction and casually swipe your debit card, only to find your account in overdraft a couple days later. It happens to the best of us, but there are ways to avoid it. While overdraft protection seems like a no-brainer, banks may charge a fee for using the service (though it will be less than the overdraft fee). Instead, download your bank’s mobile app to track your balance and transactions on-the-go. Alternatively, you can try to opt out of overdraft altogether, which will result in your card being declined if your funds are insufficient.

3. ATM
Never, ever, ever, EVER pay ATM fees. If you need cash and your bank’s ATM is not in the vicinity, head to the nearest grocery store, gas station or other retail outlet and buy something small — a pack of gum, a yogurt, a greeting card — and withdraw whatever cash you need from the cashier. Since a quick ATM trip is often due to lack of planning or impulse buys, take a moment to determine if you really need the cash.

4. Checking Account
According to Bankrate’s annual checking survey, only 38 percent of major banks offered free checking in 2013. What’s more, the average fee has jumped from less than $2 per month in 2009 to over $5 per month in 2013. If you’re paying these fees, consider transferring your checking account to your local credit union. Over three quarters of the 50 major U.S. credit unions offer free checking, and often offer lower-interest loans and better customer service.

5. Early Termination
Gyms and wireless carriers are notorious for charging early-termination fees to dissuade you from cancelling your contract. Since consumers are less enthusiastic about services that tie them down, there are numerous, no-contract alternatives for you to explore. T-Mobile is an obvious choice for a no-contract wireless plan, but smaller services like Ting and PagePlus are worth your attention. Ting uses Sprint’s network while PagePlus is a good option for Verizon Wireless network users.

6. Shipping
I can’t tell you how often I hear about the ubiquity of free shipping, even though most popular retailers don’t offer the real thing. Free shipping with minimum order requirements are everywhere, and unless you buy $35 to even $125 worth of stuff every time you order, you’ll likely get stuck with delivery fees (or overspend just to avoid them — tsk tsk!). To dodge these fees, look for coupon codes from sites like CouponSherpa.com, or hold off on ordering until a holiday weekend. By waiting, you’ll likely get your items for less and score free shipping.

7. Restocking
Some retailers charge restocking fees on opened items they can’t resell as “new.” For example, Target charges a 15-percent fee for returned digital cameras, portable DVD players and other portable electronics. Crate and Barrel may also charge restocking fees on returned furniture. Ultimately, it pays to read the fine print on retailer return policies and ideally shop with those who don’t charge restocking fees. Otherwise, research the products you’re purchasing thoroughly to reduce the need for a return. Translation: no gadget impulse buys!

8. Credit Card Interest
The National Federation of Credit Counseling estimates a person who charges $1,000 to his credit card (with an APR of 18 percent), and only makes the minimum payments, will spend 12 years paying off that balance. Bottom line: You must pay off your balance every month to avoid these fees. Set up alerts to receive email or text notifications when you’re bill is coming due. If you find you can’t pay off your balance, start using cash and focus on getting your cards paid off.

9. Foreign Transactions
Swiping your credit card while traveling outside the country can result in foreign transaction fees, typically 2 to 3 percent of each purchase. Depending on how much you spend (or how much you travel abroad), it might be worth applying for a credit card that doesn’t charge these fees. Alternatively, you can withdraw cash to use during your trip, though you might check with your bank first to see if they carry the currency of your destination country.

10. Convenience
From show tickets to toll road dues to vehicle registration bills, “convenience fees” are tacked onto everything these days. In addition to being a misnomer — there’s nothing convenient about fees — they’re also one of the toughest to avoid. Bills and invoices that charge a convenience fee for online payment always get a check from me! With show tickets, you can often shop third-party providers who make up for their convenience fees in the form of a lower ticket price.

unnamedAndrea Woroch is a nationally-recognized consumer and money-saving expert for Kinoli Inc., who helps consumers live on less without radically changing their lifestyles. From smart spending tips to personal finance advice, Andrea transforms everyday consumers into savvy shoppers. She has been featured among top news outlets such as Good Morning America, NBC’s Today, MSNBC, New York Times, Kiplinger Personal Finance, CNNMoney and many more. You can follow her on Twitter for daily savings advice and tips.

For all media inquiries, please contact Andrea Woroch at 970-672-6085 or email andrea@kinoliinc.com.