March 16, 2006
Hidden fees & how to avoid them
I am not one of those who tend to overspend and yet many times I notice that the amount payable on my bills seems to increase despite my extreme carefulness. This got me thinking and digging in detail into these bills. And was I surprised with what I learnt? Well, here’s the knowledge I gleaned.
Everything that we use in our daily lives has hidden fees attached. This includes our credit card bills to even the text messages that we keep sending each other. According to consumer reports, U.S. consumers pay nearly $216 billion in financial fees every year. That means you are paying nearly $800 in miscellaneous fees! And while they exist everywhere from cell phones to the Internet, guess who the biggest culprits are? Yes, you got it right, CREDIT CARDS. Did you know that we are paying nearly $31 billion every year in credit card fees? So, how does all this money collect? Simple, late payment involves fees up to nearly $40, if you are close to your credit limit, then the late fee can just push you over the precipice.
Then there are these enticing credit cards with low interest rates. Just cannot wait to get your hands on them? Wait till the rate gets hiked up to as much as 24 percent if you are late by so much as a nanosecond. Yes, I am exaggerating there, but you get the picture right?
Here’s my favorite one. Fine, you decide you’re done with your credit card and are not going to use it. So you lock it away and forget about it. What happens? You get slapped with another fee. At most card companies, you will have to pay around $15 if you haven’t swiped their card in six months! Here’s one trick to avoid this payment. Use your card for small purchases every now and then.
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