Whether you’re buying lunch or planning a dream vacation, added fees can quickly swell into outrageous expenses. Often buried in the fine print, these fees can be completely avoidable. A simple change today can save you hundreds in the coming year. Below, we break down how to avoid common fees on everything from financial services to travel and shopping.
1. ATM and Checking Accounts Fees
Checking accounts used to be something special. You would even get a free toaster just for opening one! If you’re still paying for ATM withdrawals or a fee because you don’t meet the minimum balance requirement on your “free” checking account, it’s time to change banks. Many online banks, such as Ally or Bank of Internet, have no minimum balance requirements and refund all ATM fees. It can be hard to deposit cash in these accounts though.
A good alternative is a local credit union. A 2014 Bankrate report found that 72 percent of the 50 largest credit unions have checking accounts with no minimum balance requirements. Many are also part of large ATM networks with tens of thousands of fee-free locations across the country.
2. Overdraft Fees
Overdraft fees can add up quickly, especially when the banks are reordering your transactions so they can hit you with the fine multiple times. Don’t get fooled into thinking overdraft “protection” has you covered either. The fee might be less, but you’ll still get charged to transfer money from your savings to checking account. Instead, call your bank and tell them you want to opt-out of overdraft services. Having a card be declined might be embarrassing once in a while, but it can save you a lot of money.
3. Credit Cards Fees
This one needs to be broken down into a few different categories, all of which you may be able to avoid with a little bit of finesse:
Annual Fees: Rewards credit cards often come with an annual fee that ranges from $49-$450 dollars a year. Many cards waive the fee the first year, and you have three options to avoid it during subsequent years. First, call the issuer and ask if they will waive the fee (often you’ll need to tell them you’re considering cancelling the card first). Some cards, such as the American Airlines AAdvantage Citi card, are well known for their retention offers that effectively waive the fee. Others, such as Chase’s Sapphire Premiere Card and American Express’s Starwood Preferred Guest card almost never do. If you can’t get a waiver, your second option is to ask if there’s a lower, no-fee version of the card. Often it won’t have as great of a rewards program, but you can easily switch with no effect on your credit score. The third option is to cancel the card: there’s no penalty for doing this and you won’t have to pay the fee, but it will lower the average length of your credit history – read how this is a factor in determining your credit score.
Foreign Transactions: If you’re buying something in a currency other than the US dollar, most credit cards will charge an extra 2-3 percent fee. Look for cards with no foreign transaction fee to avoid this extra charge. Often they’ll require a good-to-excellent credit score (mid-600s and above), but one exception is the Capital One QuicksilverOne Cash Rewards card. You can qualify for that card even if you have a fair (low- to mid-600s) score.
Late Payments: If you generally pay your bill on time but slip up one month, get on the phone and ask the bank to waive the late payment fee. If the representative says no, hang up and try again! A pleasant tone and good history with the bank can go a long way.
High Interest Rates: Holding a balance that’s costing over 20-percent in interest? Call the credit card issuer and ask if they can lower your rate. If not, consider switching the balance to a new card that has a 0-percent intro offer. Sometimes you can go interest-free for over a year. Just be sure to pay off the balance during that time or you’ll be back at square one.
4. Airlines Fees
Another category with so many fees it can be hard to count. Here are a few you should avoid:
Booking: Did you know many airlines charge as much as $25 if you decide to book your flight over the phone? If you have questions you can talk to a representative as much as you want, but have them give you flight details and then book online to avoid the fee.
Checked Bags: Even JetBlue is getting rid of the free checked bag. Avoid this fee by using an airline’s co-branded credit card, earning elite flyer status, packing light, or buying a special jacket to wear your belongings onboard.
Cancellation/Change Fees: There’s no simple way to avoid cancellation or change fees, but you can learn airlines’ policies and book with the more lenient carriers. Southwest doesn’t charge anything for standard tickets, and even allows you to cancel nonrefundable tickets and use the credit for a future flight. JetBlue’s fees start at just $75, but increase if the trip is within 60 days and the flight costs more than $100. Some legacy carriers, such as Delta, charge as much as $200. If you need to cancel a trip due to weather or health concerns and you have travel insurance, you might get a full refund. This is a feature included on some credit cards free of charge.
Rental Car Insurance
Full coverage form a rental car agency can more than double your daily rate, but you may not realize you’re likely already covered. Most credit cards include a collision damage waiver (CDW) that covers your rental car if it is damaged or stolen. Your homeowner’s or renter’s insurance likely includes coverage for off-premises theft of your personal possessions. By law, your car insurance includes liability coverage (damage to other people, property, and vehicles) and it often extends to rental cars. Similarly, your health insurance will cover you even if you’re in a rental car (although there may be limitations if you’re overseas). If you don’t want to worry about premium increases, then perhaps consider the rental agency’s offer, but generally this is one costly fee you can avoid.
Shipping When Shopping Online
Always look for a coupon code for free shipping before checking out. Often, you’ll find one! When shopping on Amazon, which rarely offers these codes, you can look for cheap filler-items to push you over the $35 threshold and receive free shipping. Also, compare prices on Saveful to see which stores include free shipping with your purchase.