5 Sneaky Credit Card Fees and How to Avoid Them

Don’t you hate it when people go behind your back? It hurts when it’s someone in your life breaks that bond of trust, and the consequences end in either a damaged relationship or damaged reputation. But have you ever thought about the fact that the companies you trust with your money are often doing the same? You might be surprised at the amount of money you can lose due to sneaky, hidden fees associated with the things you pay for every month. These can come from anywhere including, but not limited to, cable companies, banks, and airlines, earning all of those entities billions of dollars, and snatching a lot from your pocket. Not such good news if you’re already struggling financially.

So, how can you spot these without gluing your eyes to the fine print? (Let’s be honest, we all know you don’t actually read the Terms & Conditions before hitting accept.) We’ve compiled a list of the most common sneaky fees, and how to avoid them to keep your budget safe.

Late Fees

These may not be as secretive, but they can sneak up on you and take the most money from your account if you’re not careful. Seriously - consumers pay around $10 billion annually in credit card late fees. You could end up paying $25 for your first offense and almost $40 for your second. After that, your credit card issuer could then start to increase your interest. Not to mention, late payments affect your credit score, which could end up costing you even more money in the future when applying for loans.

How to avoid this

The easiest way to avoid late fees is to pay your bills on time. If you’re worried about knowing that your bill made it into your credit card company by its exact due date and time, switch to online bill payment. Through this, you can either set up an automatic payment plan, so you never have to think “did I remember to pay my bills?” ever again. If you’re not comfortable with that for whatever reason, paying your bills online will at least provide you with a timestamp for absolute security that you sent in your money on time.

You can also look for cards that don’t charge late fees. Yeah, it sounds too good to be true, but some companies will waive late fees in order to attract new customers. Even if you don’t switch companies, you can always ask to have your fee waived. You’d be surprised at what you can get if you just ask. Now, these are more bandage solutions for a one-time issue, not a permanent fix if you’re constantly making late payments. So, pay your bills on time to avoid fees, but know that there are sometimes ways to get out of it.

Check-Cashing Fees

This may come as a surprise to you, or it may not if you fall in this category, but about 40% of Americans don’t have a bank account. When that’s the case what do you do with the checks you receive? You have to find other channels for financial services to get you your money. The problem? It can be expensive.

Check-cashing stores will usually charge a percentage of the check, as well as a flat rate fee at some stores. This means that on some of your bigger checks, you’re losing way too much money when you do this often. Or, you can go to the bank from which the check was written. Different banks will charge different fees to non-customers. For some, it’s a flat rate of $5, while others may not charge a fee at all unless it’s written for a certain amount. The issue here is you have no control over which banks are being used by the people writing you checks. The cheapest option would be to go to a retailer like Walmart or  7-Eleven, whose fees will range from $1 to $6, depending on the amount you’re trying to cash. 

How to avoid this

Best case scenario: you open both a checking and savings account. The checking account allows you to deposit your checks fee free, and the savings account allows you to actually earn money overtime. However, maybe you have bad banking history and are having trouble getting approved for a checking account. In this case, you can open a prepaid account which will offer low-to-no fees and is very similar to having a checking account with a debit card. Just add money to the account and use your card wherever other debit cards are accepted.

Fees for a Quicker Tax Refund

So, you’ve filed your taxes, and now you really need that check with your refund to get these next bills paid. You may find that you can get an advance on your tax refund - but DON’T. This comes in the form of a loan, meaning you’ll be paying interest and losing money that would have been 100% yours just to get it a little sooner. While you may need that money for some important costs right now, it’s a very expensive way to loan money short-term. 

How to avoid this

If you can, just wait it out. Consider the time difference on how long it will take to get your refund back if you didn’t ask for the advance. If you really need money right away, try looking for other ways to earn money to help with any debts you may have.

ATM Fees

Just like with check-cashing, you’ll be charged a fee for using an ATM from a bank that you don’t belong to. Not much in the grand scheme of things, but just enough that it would add up overtime. Similarly, you’ll be charged (probably more significantly) for any of these sorts of transactions internationally, with an 8-10% service fee on the money transfer. 

How to avoid this

Go to your own bank, and take out as much money as you could possibly need for the purpose of your transaction - especially if that transaction is to fund your travels abroad. If you’re in a situation where you need cash right away and the only ATM isn’t one you belong to, that’s ok. Just take out $100 instead of $20, so that $2 ATM fee is less significant compared to the money you took out.

Mortgage Fees

Finally, mortgages. These suckers are full of little things here and there that just nip away at your wallet. When you apply for a mortgage, you’re charged for the application itself, for inspections, emails, and not to mention all the interest on various insurance plans and things that go into buying a home. 

How to avoid this

You can’t avoid all fees associated with your mortgage, but you can sure try your best. Like we said - sometimes all you must do is ask. While you won’t be able to avoid paying the interest on your loans, your lender may be okay with waiving the application fee, for example. Otherwise, just be smart when you’re shopping around for your lender and pay attention to reviews on who is charging too much.

Unfortunately, many companies will always be trying to pull the wool over your eyes and see what they can get away with charging you. So if these places try to be sneaky, your best defense is just asking if you’re being overcharged and being nice about it. It’s cliché, but true. So, pay attention, but especially be aware of the ones we just listed.