13 Fees That Are a Total Waste of Your Hard-Earned Money

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It seems like pretty much everything comes with fees these days — some we know about and some we don’t.

This is why frequently checking your bank, credit card and other accounts is crucial> Not only does it help you spot potential fraud, but it can also help you identify unnecessary or hidden fees that you may not even realize you’re paying.

If you don’t pay attention to where your money is going, you’re very likely wasting a lot more than you think. And frankly, paying unnecessary fees is just frivolous — a bad habit you need to kick if you want to develop a successful and long-term sustainable money routine.

13 Fees You Should Never Pay

Unfortunately, there are some fees we all just have to live with. But there are plenty of others out there that you can avoid. You just have to know what they are, how to opt out and where to find the free alternative.

1. Credit Report Fees

With the passage of the 2003 Fair and Accurate Credit Transaction Act (FACTA), all Americans are entitled to one free credit report from each of the three major credit reporting agencies — Equifax, Experian and TransUnion — every 12 months. There are several ways you can request yours, including online, by phone or by mail.

The easiest way to access your free annual credit report is to visit AnnualCreditReport.com. This is the ONLY site that’s truly free. You’ll need to provide your name, address, birth date and Social Security number.

2. ATM Fees

ATM fees are seriously one of the biggest wastes of money regardless of how convenient they may be. In fact, the average ATM fee is now $4.64!

If your bank isn’t part of a nationwide ATM network, you should consider finding one that is. And that doesn’t always mean a “traditional” bank.

A couple of examples of financial services companies that have good ATM networks are USAA and Charles Schwab. Also, many of the credit unions that have large co-op networks offer free ATMs. Online banks and credit unions also refund some ATM charges per month.

This guide can help you find free ATMs before your next cash crunch.

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3. Late Payment Fees

You’re typically charged a late fee any time you pay a bill after the due date. On top of that, making a late payment on a credit card, mortgage or another loan can also damage your credit score.

And it doesn’t matter if you’re three days late or 30 days late. Just one late payment could end up causing you financial damage for years. Plus, it shows the lender that you’re unreliable.

According to Credit Karma, here are a few potential consequences of paying a bill after the statement due date:

  • You’ll usually be charged a late fee.
  • Your interest rates may rise.
  • It may end up on your credit report.
  • It might decrease your credit score.

Ideally, you want to pay more than the minimum monthly payments on credit card debt. Since credit cards typically carry very high interest rates, the longer it takes you to pay them off, the more money it’ll cost you over time.

Look for a few expenses in your budget that you can cut or reduce, and then put that money toward your credit card debt every month.

If you can swing only the minimum payments right now, do absolutely everything you can to make those payments on time! If it means cutting something big out of the budget, then make it happen! Until you get your debt under control and paid off, you’ll never be able to get ahead financially.

4. Money Transfer Fees

There are tons of ways to transfer money, both domestically and overseas, for free. Here are some of your options:

  • You can send money from your PayPal to another PayPal person by linking up bank accounts. This is significant because it allows you to send money overseas for free.
  • Then there are also apps for smartphones that will let you send funds for free to another person:

So let’s say you’re at dinner and you want to split the bill. One person pays with a credit card or cash, but what do you do as the other party if you don’t have enough cash on hand to give them for your part of the bill?

That’s where something like Venmo or Cash App comes in handy. You can send money to anyone you want for free, simply using an email address or phone number.

However, money expert Clark Howard has a major warning about payment apps:

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“Because there’s nothing in the law that recognizes a financial instrument like these [apps], the consumer bears all the risk of fraud,” says Clark. “It makes them very, very dangerous to use. Something that seems innocent enough can end up really ugly.”

Clark’s advice is to set up a separate checking account for payment app transactions so you have fewer funds to risk if something goes wrong.

5. Checking Account Fees

With more options available today, you can get a checking account that doesn’t require a minimum balance to avoid the fees.

So before you choose a new bank, make sure to do a little research on any and all fees associated with the account. To help you get started, here’s a list of the best fee-free checking accounts.

6. Foreign Transaction Fees

Before you travel outside the United States, make sure your credit card doesn’t charge foreign transaction fees, because they can really add up. Most credit card issuers charge 3% if you use their cards outside the U.S.

Using ATMs abroad is the most effective way to get money when traveling. But some banks will charge a foreign currency rip-off fee that can be as high as $9 or $10 per transaction! 

If you’re with a big bank, check to see if it’s part of any alliance where you can use ATMs fee-free in other countries. You can also get fee-free ATM transactions abroad with most Capital One cards. 

7. Credit Card Interest

The average credit card interest rate is around 16%, according to CreditCards.com. But some cards can carry rates as high as 30%.

If you don’t pay your bill in full every month, interest charges can start to add up very quickly. And the longer that debt just sits there — continuing to add interest to the total principal you already owe — the more difficult it becomes to pay it off.

The goal with credit cards is to purchase only what you can afford to pay off in full every month because otherwise, you’ll end up wasting a lot of extra money on interest over time.

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8. Overdraft Fees

Overdraft fees usually run $30-$35 per now cost per occurrence. And if you have a few transactions go through once you overdraft your account, that can add up quickly.

Tell your bank you want to opt out of overdraft fees, and then when you try to make a purchase and there isn’t enough money in your account to cover it, the bank will just refuse the transaction.

9. Shipping Fees

If you shop a lot on Amazon, the price of an Amazon Prime membership may pay for itself in shipping costs over the course of a year.

There are also so many coupons and promo codes available these days for free shipping that you should rarely have to pay for the cost to ship something you buy online.

10. Convenience Fees

You’ve probably gone to check out at a store at some point or another and been told that you must buy at least a certain amount in order to use a credit card, otherwise you have to pay a fee.

Don’t pay it. The fee is probably greater than any rewards you’ll get from using the card, so it’s just wasted money. This is why it’s always a good idea to keep some cash on hand, so you don’t get caught in a situation when you’re forced to waste money on a fee you don’t need to pay.

11. Checked Baggage Fees

When you’re shopping for a flight, make sure to include the added cost of checked baggage fees for airlines that charge them. While the price of one flight may be slightly more expensive than another, if that carrier doesn’t charge for baggage, you may actually save money by purchasing that flight. For example, Southwest Airlines allows you to check two bags for free.

12. Partial Payment Fees

When a company splits your annual bill into monthly installment payments, sometimes it will charge an added fee. So make sure to check the fine print of your bills, and if you have the money to pay the annual amount in full, it could save you money by avoiding those extra fees.

13. Unused Subscriptions

Maybe you signed up for an online streaming service or some other subscription that you forgot about — or even know about but never use.

That $3.99 monthly fee may not seem like a big deal, but if there are several of them going through each month, they can add up to a lot of wasted money: money you could be using to pay off debt or to boost your savings.

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More Money Tips From Clark.com:

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