Hidden fees are everywhere — checking accounts, credit cards, cell phones, cable bills. It's tough to stay on top of all of the charges, but with mounting expenses and dwindling incomes, an extra $10-20 a month on a couple of bills can add up to several hundred dollars a year in unnecessary expenses.
A few years ago, Consumer Reports estimated that U.S. consumers collectively pay at least $216 billion in financial fees each year. That works out to about $750 a person in miscellaneous fees. Your cell phone bill, cable and Internet provider may slap on some hidden fees, but the "sneaky" fees in your credit card bills can really add up. Lenders collected $18 billion in credit-card penalty fees alone last year, according to the advisory firm R.K. Hammer.
So watch out for these sneaky fees:
Fees on credit card bills
- Late payment fees: $19-$39
- Over the limit fee: up to $39
- Default rate: over 30 percent APR
The instant you are late, card issuers typically impose a late fee of $19 to $39. If you're already close to your credit limit, a late fee can push you over the top — and then the bank may charge you a comparable over-the-limit fee, another $39. Even if you get a card with a 0% interest teaser rate, you could wind up having to pay a default rate of over 30 percent if your payment is late. You may be charged the default rate, even if it's just one or your first late payment. These rates can apply to customers with good credit ratings too.
Another sneaky fee: "pay by phone" charges. Some credit card companies will charge you up to $15 for paying your bill over the phone. It may be cheaper to pay online. But "pay by phone" fees aren't as common as they used to be though and if you're in a bind and have to decide being paying by phone or making a late payment, your best bet is to pay by phone, even if there is a charge, The "pay by phone" charge is most likely to be less than a late payment fee. Plus making a late payment could also trigger penalty interest rates and hurt your credit score.
Tip: Make sure you stay organized and arrange with the credit card company a payment date that you can stick to, like the day after you get your paycheck. Web sites like Bankrate.com, BillShrink.com and Credit.com can help you sort through the best card offers based not only on card rates, but also on terms and fees.
Fees on checking accounts
- Bounced check fees: $35-$45/check
- ATM fees: up to $5.50/withdrawal (up to $3/each from issuing bank, up to $2.50 from own bank)
- Check copy: $3-$10
Free checking is not so free anymore. It's against federal law for banks to hit us with undisclosed fees, but there is no law forcing a bank to explain these bank fees in terms that we can easily understand. These fees are usually buried deep within the junk mailers.
A recent study by Bankrate.com found that bounced check fees, ATM fees, stop payment and returned check fees, and check copy fees are all on the rise. Bounced check fees rose 2.5 percent over the past year and average more than $28. ATM fees can run from $2.50 to $3 from the issuing bank and up to $2.50 from your own bank. And getting a copy of your check from the bank, if you don't want to print online, can cost $3 to $10.
Tip: Avoiding those hidden bank fees means reading the fine print, being vigilant about tracking your account online, and watching out for common bank fees. Spend 15 minutes talking to a bank rep about the fees that you are currently or could be charged and another 15 minutes scouting around for the best banking deals. Bankrate.com is a good one-stop shop to check out various institutions.
Fees on cell phone bills
- Over allotted minutes: up to $.50/minute
- Text messages: $.15-$.25/message
- Text message with photo or video: extra $.05/message
- 411 calls: up to $2/call
You know you don't want to go over your minutes on your cell phone plan — that's where the extra costs generally climb. Going over your allotted minutes can run you an extra $.40 a minute. Receiving, not just sending, a text message can cost $.20 per message — add a photo and you'll have to tack on another $.25 to the bill. Calling directory assistance can cost up to $2 per call. You may be angry with the carrier for charging all of these fees, but if you cancel you may be charged a whopping $175 for terminating the contract early.
Tip: Opting for a bigger package that includes more minutes and more bells and whistles isn't always the best solution. You need to figure out where and when you call the most and what type of messaging (if any) you need or plan to use. Who has time to sort that out? Billshrink.com will do it for you for free. You can upload your online cell phone bill or manually estimate your usage, get charts and graphs about who and where you call the most, which cell phone carriers most of your friends have, and BillShrink.com figures out which of the major carriers are most cost-effective.
Consumer Reports also suggests lowering your mobile phone bill by using a prepaid plan (pay-by-the-minute plans area not heavily advertised, but are offered by most traditional carriers), reviewing your plan minutes, and bundling multimedia messages.
Hidden fees on cable TV or Internet bill
You've already cut out the premium cable channels that you never watch and are sticking with the basic package, but why is it more than the $10-$20 rate that you were quoted over the phone. Well? Did you ask about the cost for having your digital cable box or DVR or putting programming on more than one set? All of those costs combined can add another $10 a month.
(Looking at my Cablevision bill, I realized the cable company was charging me for two cable boxes for the past two years though I've only had one TV during that time.)
The low price that's advertised for internet or DSL probably does not include the taxes and fees or charge for digital cable box.
Tip: Bundling services — landline phone, cable and Internet — can be a cost-savings, but just be careful to ask the provider to itemize every expense so that you know what you're paying for and can cut out what you don't need.
CNBC personal finance correspondent Sharon Epperson is the author of “The Big Payoff: 8 Steps Couples Can Take to Make the Most of Their Money — and Live Richly Ever After.”