Christian Financial Advice and Biblical Stewardship

Digging for Hidden Fees

  • 2007 15 Jun
Digging for Hidden Fees

Have you ever wondered how banks can offer free checking accounts and still stay in business? And what’s with really nice computer printers for $99? How can companies do that and not lose their shirts?

Take that printer for example. What unsuspecting customers don’t realize is the company has attached itself to their wallets. They’ll fork over about $1,500 in ink cartridges in the first four years to use that dandy $99 printer—cartridges that never go on sale. That’s where the company makes its money. Hidden fees.

And about your “free” checking account. Just how much did you pay in ATM fees this past year? Uh, huh. You guessed it: hidden fees.

We live in a fee-driven economy. Fees are hiding everywhere—even in hotel rooms. Sure, you think you got the deal of the century—just $80 per night—but that’s going to disappear once you realize you have to pay a $20-a-day parking fee, $2 for every local phone call and if in a moment of weakness you pluck those $12 cashews from the mini bar, you’ve just been clobbered by the equivalent of hidden fees.

How about your cell phone? Since January 2002 wireless providers have charged customers nearly $1 billion in additional fees. These are not the fees you may have been so careful to avoid like roaming and extra-minute charges. These are official-looking add-ons with names like Federal Recovery Fee, Federal E911 Fee and Number Portability Service Charge.

How up to speed are you with your monthly credit-card statements? If you’re late by even five minutes with a payment, prepare to get slapped with a $35 late fee. Ditto if you go over limit.

Hidden fees are lurking everywhere. Whether you get trapped into paying them all depends on how you play the game.

Basically there are two kinds of consumers: Sophisticates and myopes. Sophisticates play the hidden-fee game with great success. They read all the fine print. There are few lengths to which they will not go to avoid paying hidden fees. They are forever having fees waived because they dare to speak up and challenge them.

Myopes—persons sufffering from short-sightedness or “myopia”—don’t see hidden fees. Companies love these naive consumers who pay hidden fees without flinching and without a single word of complaint.

The best way for myopes to get their financial vision corrected is to hang around with sophisticates. Pay attention to what they d

To counteract the high cost of printer cartridges sophisticates print on “draft” mode when the quality of the print job is not critical. That makes their cartridges last longer. You’d never catch a sophisticate plucking a tasty morsel from a hotel mini bar. They scrutinize a car rental agreement before they sign on the dotted line, refusing to accept the additional insurance (hidden fee). They fill the rental with gas before returning it because they know what happens if you don’t—$6-a-gallon added as a hidden fee. They question every fee, every charge on everything. Nothing gets past a sophisticate.

Sophisticates are on to the sneaky tricks of gift card providers. They know that gift cards begin melting away through dormancy fees and maintenance.

Have you figured out to which group of consumers you belong? Let’s check:

Do you pretty much believe that by some miracle there really is a “free” checking account?

When you rent a car do you cave in to all the add ons?

Do you just pay your cell phone bill without first questioning every charge on that statement?

If you answered yes, there’s a pretty good chance that you are a financial myope. But do not despair. There is hope for your condition. You can give yourself financial lasik surgery simply by making the decision to stop being naive and start digging.

Uncovering hidden fees is good for us. It makes us better consumers. It builds our financial confidence and provides a little padding for the wallet, too. But more than that, digging for hidden fees—and then avoiding them—is empowering.

And it’s pretty good insurance against getting ripped off, too.

© 2007 Debt-Proof Living. All rights reserved. Used with permission.

 "Debt-Proof Living" was founded in 1992 by Mary Hunt.  What began as a newsletter to encourage and empower people to break free from the bondage of consumer debt has grown into a huge community of ordinary people who have achieved remarkable success in their quest to effectively manage their money and stay out of debt.  Today, "The Cheapskate Monthly" is read by close to 100,000 Cheapskates.  Click here to subscribe.