Invest It Wisely

Maximizing your EV in life

5 Fees You Should Never Ever Pay

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avoid high feesSpeeding tickets.

Late fees.

Credit card interest.

Overdraft fees.

All of these are fees that no one should pay. They result from being careless, disorganized, impulsive or distracted.

These fees you should definitely never pay and if you do, well there’s a name for those fees. Dave Ramsey coined the term, “stupid tax,” just for those types of fees. Because you may have acted less than intelligently. We’ve all paid the stupid tax once or twice, the goal is, of course, to never pay them again.

Go slower.

Think before you act.

Plan ahead and keep great records.

Do those 3 things and you’ll never pay another stupid tax again. But what about other fees? What about fees that aren’t a result of anything you did like VAT Arrears? They just seem to exist for the sole purpose of earning the company more money. Here are 5 that you should never, ever pay. Ever.

1. Mobile Phone Upgrade Fees When it’s time to renew your contract and get a new cell phone, most major companies tack on an “upgrade fee.” For me recently, it was $36 to upgrade my BlackBerry to an iPhone. My cellular company wanted me to pay them money for the pleasure of signing another 2 year contract as well as paying for an iPhone (I only paid 99 cents for it though!). I was not interested in paying them money for that pleasure. I made a phone call, asked for it to be waived and without any hesitation, the representative did it. I asked around and many people have had the same experiences. All you have to do is ask.

2. Annual credit card fees. Many credit cards will charge you a fee for the honor of using their credit card. Some will offer you rewards and a lower interest rate as incentive to pay the fee. The credit card companies are banking on you earning them far more money in your interest over the course of the year. With the large number of credit card options out there, there is no need to pay this fee. Call your credit card company and ask that it be waived. Advise them that you have offers from other companies with no annual fee and you are prepared to transfer your business to them. These fees are not set in stone, most banks will waive it or refund it back to you.

3. Gym enrollment fees. Many gyms want to charge an enrollment fee on top of the monthly fee you pay to use the facilities. Do not be afraid to negotiate these fees. Ask for a waiver to sign a two year contract or show them advertisements for their competitors who are offering “no fee specials” for enrolling. These are popular during the beginning of the year when enrollment peaks. Be prepared to shop around but you may not need to, a simple request to the manager should be all it takes to keep your business.

4. Account maintenance fees. Many banks charge an account maintenance fee each month and if you aren’t carefully checking your account, you could be paying it too. It is usually easy to get them waived. You can set up a direct deposit usually to go into the account. If it is a secondary checking account that you don’t use often, set up a direct deposit from each paycheck for just a small amount that will allow you to avoid the fee (you can always transfer the funds later). If you can not get your bank to waive the fee, find a new bank. Banks make plenty of money from other avenues, there is no need for them to make money off of your maintenance fee. Credit unions are a great place to put your money. There’s usually one for every type of person. We have one in my area that advertises as being for “anyone who lives, works or worships” in the area. Look for something like that in your area and avoid unnecessary bank fees.

5. Interest. There are some situations where you can not avoid paying interest. A home loan, student loan or other types of loans, for instance make it nearly impossible to avoid fees. However there are times when you should never pay interest. Buying furniture is one such time. If you are buying furniture for your home and plan to finance it rather than saving the money beforehand, take the time to wait for a “No Interest” special. These happen all the time, usually around major holidays, like Memorial Day or Labor Day. You can almost always find “24 months, same as cash” deals. When you take advantage of this deal, pay it off in the 24 months. You should never, ever pay interest on furniture, carpeting or many home repairs. Financing without interest is almost always available.

We all have to pay a stupid tax from time to time, but we should never pay unnecessary fees.

What fees have you seen out there that no one should ever pay? Have you paid any in the past that you know you could avoid now? 

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Comments

  1. I couldn’t agree more regarding most of these. Interest is such a money waster to me, and so is account fees. I think the credit card annual fee depends on the card. Some cards have a fee but the benefits you get from the card far outweigh the cost.

    • It took me many years to understand how much of a waste interest was on the silliest of purchases. I wasted so much money in my past.

      Thanks for your reply, Tushar!

  2. I pay annual fees on 2 credit cards. One is an airline card and the other is a hotel card. I have received more rewards from both far in excess of any fees. I think you need to look at all your expenses and see if it makes sense.

    • I think for the average person, the fees do not justify the rewards. I don’t think there a lot of people are really, truly making sure they can reap the rewards to the fullest. And that is why the credit card companies are offering them. The majority of people will pay the annual fee and not utilize the rewards, making the annual fee a waste of money.

      Have you ever tried to have it waived? Give them a call, I bet you could avoid paying for it as well!

    • Oh no! Definitely try again and if the phone rep says no, you could always try in the store. Or ask to speak to someone else. I wouldn’t give up with one “no.”

      Thanks for your reply.

    • It feels great to know we can control the fees that companies try to assess us!

      Thanks for your reply!

  5. Interesting post. I had a client come in with “C” class shares which exact a 1% commission if sold before holding for 12 months. We patiently waited out the 12 month period and then sold them. The mutual fund company, PIMCO, still took the fee. We had to fight to get them back. It makes one wonder about how many naive investors pay unwarranted fees to the giant mutual fund companies who should already be embarrassed (fat chance!) about the fees they charge.

  6. I paid the stupid tax when I hooked up to comcast cable years ago. $35 for the 10 seconds it took to flip the switch in their locked cable box outside my house. Great to hear that just by calling or asking you can get alot of these ridiculous fees waived.

  7. Great advice Jessica! One line really struck me “all you have to do is ask” because it is simply true. Some people are too lazy or sometimes too shy to ask or complain about things and they end up paying more than they ought to. In my case, whenever something struck me as unusual or I feel that something is not right, I make it a point to clarify the matter- after all, that’s the reason why most companies have customer service department to handle those things.

  8. These fees are really not necessarily and most companies are using these fees for their additional earnings while tricking their customers because we will not benefit from these. As a consumer, we have to be always wise enough to check on the extra fees we pay.

  9. I am horrible at this and its from lack of effort. Usually the wifey does all the haggling. And she is very good at it. Asking it the easiest and most difficult part that not too many of us do.

    • I think companies are banking on it being too much of a hassle for most people. The fees are there to beef up their bottom line without costing them anything at all.

      Thanks for the comment!

  10. These are definitely good things to remember! I wasn’t aware that the cell phone companies can drop the upgrade fee. Looks like i’ll be giving them a call! Thanks for the tips!

  12. Interesting post Jessica. So many people have a phobia about negotiating certain fees and often many businesses simply charge them as they know a percentage of customers will not quibble about it. Your example of gym enrollment fee is a good one. There isn’t a gym in the world that wouldn’t be willing to waive that to recruit a new member.

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