Fees. No matter what they’re for, they are not very popular. Unfortunately, fees aren’t going anywhere. We will probably encounter more than the expected in the coming years. CNN Money discusses 15 fees we should be on the look-out for:
1. Forking over new charges for overdrafts: Often banks allow you to link a savings account to your checking account so that funds can be pulled from the former if you overdraw the latter. This workaround can help you avoid nonsufficient-funds fees, now averaging $30, according to Bankrate.com. But many banks have found a workaround for your workaround: They'll charge you $10 to $20 every time they transfer your money between the accounts. Meanwhile, it costs the bank next to nothing to move the funds, says Bryan Derman of Glenbrook Partners, a financial services consulting firm. "They're charging you for what's essentially an automatic transfer!" echoes reader Zoe Dowling, whose bank (Wells Fargo) levies the fee.
How to fight back: Sign up on your bank's website or Mint.com for e-mail or text-message alerts that tell you when your checking account balance is below a certain amount. That way, you can make transfers for free, yourself--before an overdraft is triggered.
2. Paying to use your frequent-flier miles: Can it really be called "reward travel" if you have to pay for the reward? To redeem your miles for any flight on US Airways, you must pay a $25 to $50 fee. ("It's an effort to recoup a portion of the overhead of the program," says spokesman Todd Lehmacher.) American, United, and Continental, among others, usually make you pony up $50 to $500 one way to use miles for upgrades.
How to fight back: Stick to one airline, and try to achieve gold or platinum status (which generally involves flying at least 25,000 miles a year). That way you'll escape redemption fees, says Randy Peterson of WebFlyer.com. Don't travel that much? Consider a credit card that lets you earn miles -- specifically "elite qualifying miles" -- such as Platinum Delta SkyMiles American Express (800-223-2670). Just be sure to weigh the annual fee against the benefit you'll get.
3. Paying to shut a brokerage account or IRA: No matter how unhappy you may be with your broker, you may be even more unhappy to discover that you'll have to shell out money to sever your relationship. Many of the major firms -- such as Fidelity, Schwab, and WellsTrade -- charge transfer fees, generally between $50 and $200, if you close your account and move your money to a different firm. Reader Eric Nix finds it "outrageous" that he had to lay out $50 to switch brokerages. Benjamin Poor of Cerulli Associates, a financial services market research firm, agrees. "It's like having a bad meal at a restaurant, then being charged to leave the building."
How to fight back: If your current brokerage is holding you hostage with its fee, appeal to the company where you want to move your funds. Many will reimburse you. To prevent these problems down the road, when you first sign up at a brokerage, ask that it waive such fees. "These things are negotiable, especially if you have a sizable account," says Mason Dinehart, a securities expert witness. (Sizable means six figures.)
4. Plunking down to hang up on your cell carrier: Agreeing to a cell phone contract is sort of like signing over your soul to the devil: You know there will be hell to pay if you break your end of the deal. In this case you'll owe $200 to $350. Such fees usually subsidize the cost of the handset you bought at a low price, says Bob Sullivan, author of Stop Getting Ripped Off.
How to fight back: Try to talk your way out of the fee, mentioning examples of poor service you've received (keep records and cite them). Customer rep won't budge? If you can stand it, stick with the carrier a while longer. Termination fees are generally pro-rated, so the longer you hold out, the less you'll pay. Next time consider a prepaid phone, which doesn't require a contract. It's generally a good deal if you use it less than 400 minutes a month during peak hours, says Sullivan.
See all 15 fees and how to fight back here.
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