Over the course of our lives, we are collectively nickel-and-dimed to death. There are the things we need (or want) to pay for, and then the fees we’re expected to pay above and beyond the supposed cost of those things: There are mysterious hotel fees, egregious airline fees, youth-punishing car rental fees—the list goes on and on. But what really burns about fees like this is that they make you feel manipulated—we’re supposed to play along with the fiction that this isn’t just a cash-grab on top of an already-negotiated price.
That being said, some fees have a much higher bullshit quotient than others. You can’t avoid all the fees our capitalist masters throw at us, but there are plenty of stupid fees you can avoid—and should never pay.
If you haven’t embraced a cashless existence, you’re probably still dealing with the piles of loose change that accumulate in your pockets throughout the day. Eventually you have a pickle jar filled with coins, and when your paycheck has been stretched so thin you can see through it, that change starts to look like real money. And there’s a Coinstar machine in the local grocery…that will eat nearly 12% of the value of your coins in fees.
The term scientists would use for that fee is outrageous. To avoid the fee, you have two choices:
Gift card. Coinstar gives you the option to get a gift card instead of cash for your change, and there is no fee if you go this route. Gift card options are limited, but are as good as cash as long as you need what those retailers are selling.
Bank. Most banks don’t offer coin-counting services, and will politely refuse a pile of filthy pennies dumped on their counters. You can usually get coin rolls from them for free (just ask!) and then roll the change yourself—properly rolled change can be deposited in your account easily enough. This can be time-consuming, but a relatively cheap coin counter will pay for itself pretty quickly.
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Getting charged a fee to access your own money is one of the stupidest fees of all time, but ATM fees are tough to avoid when you need cash and your only option is a sketchy ATM in a 7-11. You can, however, take some steps to eliminate these fees—primarily, by moving your money to a bank that refunds these fees.
If you’re in a pinch, another tactic is asking if the store can give you cash back with a purchase. This only makes sense if you actually need something at that store—otherwise it’s a fee wearing a funny hat.
If you’re not checking your credit reports on an annual basis, you should start—it can take a long time to notice identity theft, and even honest mistakes on your credit report can have a huge impact on your credit score, and thus your life. But if you’re ever asked to pay a fee for a credit report, you’re being duped. By law, all three major credit reporting companies (Equifax, Experian, and TransUnion) have to offer you one free report every year. Just head to AnnualCreditReport.com and go through the process. Some banks and credit card companies also offer free credit reports as part of having an account with them, which can give you an extra report—and you can’t have too many.
Paying any sort of late fee on your credit cards or other credit lines is inexcusable. Paying the minimum on an account is a bad idea, but it’s a lot better than being charged an outrageous fee on top of everything else. Setting up an automatic payment is the smart play—you can still manually adjust your payments to pay more than the minimum, but if you forget, you’re still covered against stupid fees.
If you do forget or simply make a scheduling mistake and get jammed with a late fee, contact your lender. If it’s your first late fee, there’s a good chance they will reverse it if you offer an explanation.
Most car dealership fees
Buying a car is an exhausting and dispiriting experience for most people. Traveling to dealerships, talking with aggressive salespeople, and trying to comprehend all of your options just drains the life out of you. Making the whole situation worse is that many dealerships engage in a game of adding stupid fees to your purchase agreement. Advertising fees, delivery fees, undercoating fees—there are so many unnecessary fees tacked on to some car sales it’s difficult to keep track. The good news is getting rid of these fees is often as easy as asking about them—for some reason the moment you point them out, they melt away.
Gym initiation fees
If you’ve joined a gym at any point in your life you may have noticed an “initiation fee” on your first bill. This is a classic stupid fee, as it’s simply a cash-grab.
The way to avoid this fee is to ask about it when investigating the gym, then ask them to waive it. Gyms are almost always under membership pressure as people cycle in and out, and many of the salespeople trying to entice you into joining have a quota they have to hit. That means they will almost always drop the initiation fee if you make it a condition of signing up for a yearly membership.
If you’ve got an individual retirement account (IRA) set up, good on you. Putting tax-deferred money aside for your retirement is smart, and an IRA is a relatively safe and easy way to make that money work for you. Just make sure you’re not getting hit with an account maintenance fee. These fees might seem negligible, but trust me when I say the institution managing your money is making plenty from you as it is—maintenance fees are just egregious. You can roll your IRA over to another account any time you like, so find a place that doesn’t charge any fees—or contact your current bank or financial advisor and ask them to get rid of the fee. Most will rather than lose your business.
Car insurance processing fees
Owning a car means owning a lot of expenses. Aside from fuel, maintenance, and depreciation, your car will cost you in terms of insurance. And if you pay your insurance on a monthly basis, your insurer may be charging you a “processing fee” for the privilege. This fee covers their costs, because every time they charge your credit card they get hit with a fee on their end.
If you can, paying the whole premium up front will get rid of that charge. If you can’t put together a lump payment, though, you’re probably stuck with the monthly fee.
Buying a house is expensive. Aside from the down payment, there’s the interest you’re paying on your mortgage and the closing costs. It adds up quick.
So you should be vigilant when it comes to avoidable fees that some lenders roll into your mortgage. They often toss in application fees, underwriting fees, rate lock fees, mystery processing fees, which add up to a pretty eye-popping amount of extra money you have to pay. The key thing to remember here is that you’re negotiating—there are a lot of lenders out there, and unless you’re desperate to buy a particular home or within a specific period of time, you can shop around for the best mortgage deal. That means you can always ask to have these fees reduced or eliminated—and you should always ask your potential lender to do so. You might not get them all knocked down, but even some reductions will make a difference.
Utility card processing fees
The world is going paperless and online. In many cases you no longer get paper bills from utility companies and the like, and when you go online to pay your bill you’re faced with a processing fee for using a credit card.
But you don’t have to pay this stupid fee. Most utility, water, and sewage providers will let you pay via e-check or direct withdrawal from your bank. E-checks are essentially the same as a paper check—you provide the routing number and account number and your bank processes the payment as if you’d written a check. It might take a few minutes to set up, but it’s a secure and fee-free way to keep the lights on.
Your bank might seem very helpful when they offer you “overdraft protection.” Instead of bouncing checks or having your card declined when you make a mistake and let your checking account go to zero, the bank graciously covers your overage until you can shift some money into your account. Of course, they charge a fee, typically under $50, for their trouble.
If you’re overdrawn by a few pennies, however, $50 is an outrageous fee. Instead of using your bank’s overdraft protection, see if you can link your savings account to your checking account so overdrafts get pulled from there. If that’s not possible, you can drop the overdraft protection and just pay attention to low-balance alerts that you can set up using your bank’s app.