8 Fees You Need to Stop Paying Right Now

by Miranda Marquit on 18 December 2013 (20 comments)

This post is brought to you by Discover it.

We all like to know that we are getting the best value for our money. In fact, most of us don’t mind paying for something that provides us with good value in return.

Unfortunately, you might be surprised to discover that there are plenty of fees you are paying right now that provide you zero return for your money — and those fees add up. Here are eight fees you need to stop paying .

1. Overdraft Fees

One of the most lucrative fees for banks is the overdraft fee. When you go over your limit, you pay a fee of anywhere between $25 and $45, depending on your bank’s policies.

The CARD Act passed in 2009 prevents credit cards from charging you unless you opt in to allow overdraft transactions. Check your preferences to see if you opted in. If you did, opt back out.

With your checking account, either track your spending and improve your cash flow to avoid checking overdraft, or see if you can connect your account to a savings account or a line of credit to avoid the higher charges. If you use a line of credit, make sure you pay off the charge quickly to avoid interest.

2. ATM Fees

ATM fees continue to rise. If you use an ATM not owned by your bank, you could be hit with two charges — one from your bank, and one from the ATM. Instead, open an account at a bank that reimburses your ATM fees, or only use ATMs owned by your bank. You can also avoid the ATM by asking for cash back when you use your debit card at the store or by going in and speaking with a teller at a bank.

3. Third-Party Cell Phone Fees

Watch out for third-party cell phone fees. For example, some carriers might show charges for third-party message services. Look through your bill carefully to find these charges, then call your carrier and cancel them.

You might also find a charge for directory assistance (411 charges). Thanks to Google, most of us don’t need this. If you have a data plan, you can just look for the number online.

4. Investment Account Maintenance Fees

If you have an investment account, check to see if you are paying maintenance fees. Some brokers charge a monthly or annual fee just for “account maintenance.” If you meet minimum requirements, you might be able to avoid this fee, but there are brokers that charge the fee regardless. The good news is that there are plenty of online discount brokers that offer accounts without maintenance fees. Transfer your money to the new account and save. (But watch out for brokers that charge you fees for moving your money or closing your account.)

5. Unnecessary Credit Card Fees

Some credit cards charge annual fees — but not all of them. That means that if you’re currently paying an annual fee, it’s time to search for a new card — you can even find rewards cards without annual fees. Also, if you are a traveler, there is no reason to pay the foreign transaction fee. Increasingly, there are credit card issuers that won’t charge these fees.

6. Extended Warranties

When you buy certain products, you might be offered the opportunity to purchase an extended warranty. The fee you pay for an extended warranty is rarely worth it. Many products have manufacturer warranties that work just fine, and many credit cards offer extended warranties as well if you use them to make your purchase. Check your credit card benefits to find out if you are protected. You can usually get an extension of at least one year beyond the manufacturer warranty when you buy with a credit card.

7. Checking Account Fees

A couple of years ago, there was an effort by the financial industry to move toward adding fees to checking accounts. Consumers expressed their feelings on the subject, and, as a result, it’s still possible to access free checking accounts.

If your bank charges you a monthly fee just for having a checking account, you can look elsewhere. There are still plenty of credit unions, online banks, and even more traditional banks that provide free checking. There’s no reason to pay a monthly fee to access your own money in a deposit account.

8. Roaming Fees

Whether you’re using your cell phone for checking email, surfing the web, getting GPS directions, or even making actual phone calls, it’s important to pay attention to roaming fees when you travel. Call your provider to find out how much you will pay for data and talk. Also, realize that you might have extra charges if you are based at home, but talk or text with someone outside the country. I was surprised when I discovered that my texts to a friend in Canada cost extra (even though calls didn’t). Find out what to expect, and then do what you can to mitigate the costs. In some cases, if you are going on an extended trip, it can make sense to get a different plan compatible with the area you are visiting.

What unnecessary fees have you stopped paying?

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Guest's picture
Tony

And the meanest fee of them all is buying what you just do not need. To fight this just use a shopping list application which is always with you and does not let you forget the rule. for example the one I use https://play.google.com/store/apps/details?id=com.gal.appshoppinglist&hl=en

Guest's picture
Heather

So true! I 100% agree with this post...there's no need to waste money on fees like this.

Guest's picture

Good list of fees to watch out for. I hate that some brokerages charge to move or close an account, but it is still probably worth paying that cost if they are charging a monthly account fee.

Guest's picture
hannah

I don't pay a single one of these fees. The only one - that I rarely pay - is .25 when I write a check off my otherwise free checking account!

Guest's picture
Jack Buechner

If it costs you a quarter per check, just exactly what is FREE?

Guest's picture
Guest

Hannah, I don't know where you live or bank, but you absolutely should not have to pay anything for writing checks off your own account! I would look for a new bank immediately if I were you, there are so many options out there. My husband & I have checking & savings at Chase. Our checking account is 100% free, we don't pay any fees for anything, not even to write a check. Online bill pay is free too.

Guest's picture
Wondering About Value Of %5.75 Fee Funds

When I married, I looked at a managed fund my wife used. The load on all funds contributed was in the area of %5.75 +/- 1% plus every year a .6% fee plus we owe another $80. for the fund. When I asked the person if they get paid from the %5.75 they said no.

So if she wanted to invest 10K she actually had to pay like 10,610 then on top of that she had to pay $80 annual fee + the fund charges like $60. So after it is all said and done with the down market we lost big time. Now we are starting to recover.

But it makes me wonder how that $610 paid out in one big chunk really helped me.

Then each year how that $140 really helps me. Especially when you see the total going down down down. The only help is that the amount does not go down as fast when the total is so much less. So when the 10,000 went down to $5,000 we lost less money at $5,000 than $10,000.

Also now that the initial sales fee is paid, I wonder if they want us out of the fund because we are not paying the $600 all the time and now they have to support our account.

Guest's picture
Thrifty investor

To Wondering about Value

There is no value in paying a load plus high fees. I am in the investment management industry and I can tell you from experience, if you want to invest in stocks open an account with vanguard and buy the S&P 500 (no load and the fee is less than .1%). Then Forget about it and let the compounding work for you.

Guest's picture
Guest

Cable! Get a digital antenna and Netflix with Roku or chromecast.

Guest's picture
Jcdchawk

I discovered my 87 year old neighbor who is barely surviving financially was still paying a monthly fee for her telephone. I got her to cancel that phone immediately.

Guest's picture
Mimiok

Most landline phone companies offer free phone service to seniors with minimal income. My mom was eligible for and received this free phone service through AT&T.

Guest's picture
Lou

"I got her to cancel that phone immediately"

So, good Samaritan, how will she contact anyone without a phone, including potential emergencies? My elderly father is 94, and the last thing I'd cancel is his connection to the outside world.

Guest's picture
Kerry

Whether it's a fee or a charge, if you have a home phone [land line] and you also have a cell phone, make sure to cancel the charge that is automatically included for long distance call making. Almost all cell phones can make long distance calls for free, so why should you pay for this on your home phone also. CANCEL IT and save yourself a good chunk of change, and make those long distance calls using your cell phone!!

Guest's picture
Patricia

I have a question. Is uninsurrd motorist insurance a total waste of money? Dors this mean we are paying for someone who does not have insurance?

Guest's picture
Guest

In some states it is legally required. As an example here in Texas, repeated statistics show that 35% of all Hispanic drivers do not get insurance. That's a fact, not a "racist" statement. So, when you get hit by an uninsured motorist, you can collect on the damage to your car, ASSUMING it was not your fault. Yes, Patricia, you DO pay for other people's insurance when this is the case. What can you do about it? Effectively, nothing.

Guest's picture
Alex

No, it means your insurance will pay for the repair/replacement of your car, and any health expenses and lost income you may incur, if an uninsured motorist hits YOU. If you don't have clause on your insurance and somebody who doesn't have insurance in force runs a red light and t-bones your car in the middle of the intersection, all the costs for that are on you. Sure, you can sue the uninsured driver, but chances are he doesn't have the money to cover your expenses, so even if you sue him and win you're out of luck. Uninsured motorist coverage is the LAST optional extra I'd give up if I had to cut my car insurance costs.

Guest's picture
Landlord Bill W

It's going to get worst with Obama care. Those who don't work and can, get paid our hard earned wages. Then they can't afford Obama care and those who can will pay for them to get sick. The penalty is cheaper then the premium. Sounds cruel but turn them away or set them down at a computer and tell them when you log on, get insurance we'll treat you, otherwise get sick somewhere else.

Guest's picture
Brian

Convenience fees

Guest's picture
Alex

If you mostly use a debit card to access your checking account rather than writing paper checks, you can have it set up so that the card will simply be declined if you don't have enough money in your checking out to cover a charge, rather than having the bank cover it and hit you with an overdraft charge. Of course, that could be a problem if you've just eaten in a restaurant and don't have any other way of paying for the meal, but if you have some kind of back-up means of payment, it can save you a lot of overdraft fees.

Incidentally the banks weren't always required to give you that option, and when they weren't, they didn't; I've read that overdraft fees are the single biggest profit center for the consumer banking divisions of a lot of major American banks, and their lobbyists complained bitterly about the provision of the Dodd-Frank bill that allows debit card users to opt out of overdraft fees.

Guest's picture
Guest

First, I should say that I shop on eBay first as I pay a fraction of the normal price for most items, especially car parts, clothes, jewels, jewelry and all other manner of items. When purchasing I try to always buy from out of state and where they are not yet collecting taxes for California. This is bound to end, but for now it is a savings that when buying expensive items like cars, can save hundreds to thousands of dollars. Of course transportation fees will be a consideration, but I save a great deal of money shopping on the internet, and am just now exploring Amazon and other sites as there are companies in Canada where not only are medications far cheaper, but so are car parts. Just check out sites in automotive, jewels etc. and you will see it is the best there is and better than amazon. Rob Kilborne