Fees are a fact of life for everyone, but some fees are truly outrageous. From hidden charges to unexpected add-ons, companies are finding new ways to nickel and dime every step of the way.
1. “Convenience” Fees
Some companies charge a “convenience fee” for the privilege of paying online or over the phone. This fee can range from a few dollars to as much as 15% of the total purchase price. There is no justification for this fee, as it costs the company nothing to accept payment electronically.
2. Early Termination Fees
Many service providers, such as phone companies and cable providers, charge customers an early termination fee if they cancel their service before the end of their contract. This fee can be hundreds of dollars, making it nearly impossible for customers to switch to a better deal. Always be careful what you sign and check how long the contract lasts.
3. Baggage Fees
Airlines are notorious for charging baggage fees, but these fees are particularly egregious. Some airlines charge as much as $100 for a single checked bag, making it more affordable to ship your luggage separately. These fees make it difficult for families and budget travelers to afford air travel.
4. Resort Fees
Many hotels charge a daily resort fee in addition to the advertised room rate. These fees can be as much as $50 per day and are charged regardless of whether you use any of the amenities. This fee is particularly insidious, as it is often hidden until the customer checks in.
5. Overdraft Fees
Banks are well-known for charging overdraft fees when customers spend more than they have in their accounts. These fees can be as much as $35 per transaction and can quickly add up. Banks often process transactions in a way that maximizes these fees, making it difficult for customers to avoid them. The poor become poorer.
6. Credit Card Processing Fees
Small business owners are often charged a credit card processing fee for every transaction they accept. These fees can be as much as 4% of the total purchase price, cutting into the business’s profits. This fee is particularly egregious, as it penalizes businesses for accepting credit card payments, which is now the norm in our connected society.
7. Cancellation Fees
Some companies charge cancellation fees when customers want to cancel a service or product at any time. These fees can be as much as $500, making it nearly impossible for customers to get out of a contract they no longer want or need. These fees are simply a way for companies to lock customers into seemingly indefinite contracts and extract more money from them.
8. Inactivity Fees
Some companies charge inactivity fees when customers don’t use their accounts for a certain period of time. These fees can be as much as $10 per month and are often hidden in the fine print of account agreements. These fees penalize customers for not using a service and are a clear attempt to squeeze more money out of them.
9. Paper Statement Fees
Many banks and credit card companies charge customers a fee for receiving paper statements in the mail. These fees can be as much as $5 per statement and are often hidden in the fine print of account agreements. These fees penalize customers for wanting to receive important account information in a format that they can easily access and understand.
10. Activation Fees
Some companies charge activation fees when customers sign up for a new service or product. These fees can be as much as $50 and are often hidden in the fine print of contracts. These fees are simply a way for companies to charge customers more money for signing up for a new service or product.
This article was produced and syndicated by The Cents of Money.
With a passion for investing and personal finance, I began The Cents of Money to help and teach others. My experience as an equity analyst, professor, and mom provide me with unique insights about money and wealth creation and a desire to share with you.