Smart SpendingSmart Spending

10 of the most insulting fees

The frenzy of fees in everything from travel to banking is the financial equivalent of a cold slap in the face. Here's how to work around them.

By Stacy Johnson Dec 3, 2012 1:25PM

This post comes from Stacy Johnson at partner site Money Talks News.


Money Talks News logoYou offer me something I want, we agree on a price, I pay for it. It's the way the world has worked for thousands of years. These days? Not so much.


Today, with an increasing number of businesses, it goes more like this: You provide something I want, we agree on a price, I pay, and then you tack on fees to fatten your bottom line.


Unreasonable fees are more than just a drain on your finances. They're insulting -- the financial equivalent of a cold slap in the face.

Here, in no particular order, are 10 of the most insulting fees. They made my list for one of three reasons: They're unreasonable, you're getting little or nothing in return, or they're ridiculously overpriced.


Image: Airport baggage claim (© Digital Vision/Getty Images)Airlines

1. Checked baggage fees

Most major carriers charge $25 to check one suitcase -- a lot more if it's oversized, overweight or both.


This fee didn't exist until recent years, and for good reason: The price of a plane ticket should include luggage. Isn't that an integral part of traveling long distance? No other travel-related services -- buses, trains, hotels, cabs, rental cars -- charge for luggage. This isn't a fee; it's a sophomoric attempt to disguise a higher price.


Workaround: Two major airlines don't charge this insulting fee -- Southwest and JetBlue. Fly them if you can. If you can't, look online to see how much your airline is charging and use that as an incentive to pack light. Some airlines also allow you to avoid baggage fees by using their branded credit cards.


2. Carry-on baggage fees

At least when you pay to check a bag, there's a service involved. Someone has to load it, unload it and make sure it gets safely back into your hands. Charging for a carry-on bag is charging for nothing whatsoever. Nobody is touching your bag but you, making this fee indefensible.  Fortunately, Spirit and Allegiant are the only U.S. airlines that do it, at least so far.


Workaround: Avoid flying Spirit, Allegiant or any airline that charges for doing nothing. If that's impossible, check with UPS or another freight carrier about shipping bags.


3. Lap fees, pet fees

If your child is younger than 2, it's typically free to carry them on your lap for a domestic flight. Leave the country, however, and you might pay a "lap fee" of 10% of the ticket price. And not the cost of your ticket: a full-fare ticket -- the most expensive available. 


Fees also apply when you're flying with Fido. If you have to ship your pet in the baggage compartment, you'd expect a handling fee. But bring them with you in the cabin, and you'll still pay up to $125 each way. Again, the airline is doing nothing but collecting a hefty fee.


Workaround: Check with the airline before you book the ticket to see what fees, if any, you can expect. If they're high, shop around. Some airlines charge less than others. 


Rental cars

4. Collision damage waiver

This is the pricey insurance replacement you're hammered to buy whenever you rent a car. CDW makes the list of insulting fees because it's overpriced: It can cost $25 a day. Add extra liability coverage, and you could be paying $40. That's the equivalent of a car policy costing $14,600 a year, with lousy coverage. For example, CDW can refuse to pay if there's an unauthorized driver or in other situations where you violate your rental agreement.


Workaround: If you have full-coverage insurance on your personal car, you're probably covered in rentals. There's also coverage available through some credit cards. Check both sources to see if you can skip this overpriced coverage at the rental counter. Be aware, however, that even if you have insurance on your car, you could still be on the hook for "loss of use" claims by the rental car company if you have an accident that takes the car out of service.


If you're using a credit card protection plan, be aware that not all rentals are covered. For example, pickups and vans are often specifically excluded. The devil is in the details. 


And don't buy any coverage at the rental car counter without fully understanding the exclusions.



5. Credit card rates

While technically not a fee, the interest rates charged by many credit cards are outrageous. Big banks borrow from the Federal Reserve at close to 0%, then lend money to credit card users at 15%. Nice work if you can get it.


Workaround: The obvious solution is to avoid interest by avoiding a balance. But if you're going to pay interest, shop for a card with a lower rate. Another idea? Simply call your card company and ask for a better deal. Tell them you're being solicited by other cards offering lower rates, because you probably are.


6. Foreign transaction fees

This fee is charged on credit card purchases processed outside the U.S., when you use your card in another country or buy something from a non-U.S. company. Banks that charge this fee typically collect 3% of every transaction. The implication is that it's related to the intricacies of currency conversion. But lawsuits have revealed these fees are nearly pure profit.


Workaround: If there's any chance you'll be making purchases outside the U.S., use a card that doesn't charge this fee. 


7. Overdraft fees

If you overdraw your account and the bank uses its money to cover your negative balance, it deserves to be compensated. But how much? Overdraft fees average from $30 to $34 nationwide.


Says CNBC, "Charging $34 for covering the average overdraft of $36 for a week (when banks usually hit overdrawn customers with a second, 'extended overdrawn balance' fee) amounts to a 5,000% annual interest rate."


Workaround: Link your savings to your checking account for overdraft protection. This might result in a transfer fee, but it will be lower than an overdraft fee.


8. Checking, loan and other banking fees

Not earning interest on your checking account is bad enough. But now banks want you to pay -- often upward of $100 a year -- just to have a checking account. Want a paper statement? Not long ago that was your only choice. Now, it will cost you. Why should you pay to use an ATM, even another bank's? You're saving the bank money, not costing them. When you use the automated checkout at the grocery, they don't charge a fee. Banks shouldn't either.


Workaround: There's no reason to get slapped around by any bank. Credit unions typically charge lower interest on loans and credit cards, pay more interest on savings, and have lower overall fees than banks. Think they don't have enough branches? You're probably wrong. Many credit unions belong to a shared branch network of nearly 5,000 locations that allows members of one credit union to conduct business at any other member credit union anywhere in the country -- even overseas.



9. Resort fees

The concept of paying to stay at a hotel, then paying more to use on-site amenities is ridiculous. The FTC recently sent a warning letter to 22 hotels, accusing them of potentially violating the law by bumping up the prices listed on their online reservation sites with hidden fees. From their press release:

One common complaint consumers raised involved mandatory fees hotels charge for amenities such as newspapers, use of onsite exercise or pool facilities, or Internet access, sometimes referred to as 'resort fees.' These mandatory fees can be as high as $30 per night, a sum that could certainly affect consumer purchasing decisions. The warning letters also state that consumers often did not know they would be required to pay resort fees in addition to the quoted hotel rate.

Workaround: Before you book a reservation, find out in advance what fees you'll be expected to pay, and if you hear something you don't like, just say no. Explain that you're a good customer, don't find the fees fair and would like to skip them. Just make sure you're talking to a front-desk decision-maker, not an 800 number.


10. Internet service

When the Internet and Wi-Fi were new, perhaps it was justifiable to charge a fee to access it. These days, charging for Internet access makes as much sense as charging for the in-room TV or air conditioning. Fifteen dollars a day? Give me a break.


Workaround: If you can't find a hotel with free Wi-Fi, ask to have the fee waived when you check in. If that's not an option, find it free elsewhere -- either in the lobby or a nearby hotspot. There are plenty of free apps that will help you find the nearest one. 


The bottom line

When I write articles that include lists and have titles starting with "10 tips" or "10 things," it's sometimes tough to fill the list. But not with this article. I could have kept writing: Ticketmaster, car dealers, gift cards, cellphone companies, schools, mutual funds -- there's plenty of fodder. 


What do you think? Am I being too hard on these businesses? What's the most annoying fee you've paid? Sound off below. It doesn't cost a thing.


More on Money Talks News and MSN Money


Dec 3, 2012 5:40PM
The most irritating fee I've come across was a $3.00 per ticket "seat" fee for a concert. I sent Ticketmaster an email asking them exactly what the $80 I'd paid per ticket covered if not the seat. I received no response.
Dec 3, 2012 6:23PM

The fees mentioned in your article are all bad, agreed, but there are options for those. One of the most outragous fee's are those for buying tickets for events, diguised as "convience fee's". I wanted to take my family to an event recently, and ordered 5 $25 tickets. But the time all the "convience" fee's were added, I was looking at $203.25. It was going to be a financial stretch to do this and I expected addition fee's but 62.6%. This is outragous. Fortunately, I was going to surprise them with the tickets, since I could no longer afford them after the fee's, eliminating disappointing them. How do we battle these fee's?  typically there is only 1 vendor for these event. Just another example of the corporate greed that is destroying our country.

Dec 3, 2012 3:10PM

My co-worker cashed a check from her friend at a Wells Fargo (the friend had an account somewhere else) and when the check bounced, Well Fargo slapped her with a $12 bounced check fee.


Another guy I went to college with got charged with a fee at Wells Fargo for depositing a check that was too big. (If I remember right, it was less than $1000)


My mortgage was bought by Wells Fargo. If I want to pay via internet, I must first set up a bank account with them that costs $5 a month


I hate getting nickeled and dimed and I hate Wells Fargo

Dec 4, 2012 12:11AM

A well-known seniors tour group charged a $100 fee when I cancelled my father's booking after he was killed in a car accident a few weeks before the tour. "Sorry, it's our cancellation policy," they said.


I suppose they lose a fair amount of revenue from seniors who may expire between the booking and tour, but still that seems really cold to me.

Dec 3, 2012 4:33PM

When debit cards first came out, Wachovia Bank (recently bought by Wells Fargo) aggressively promoted them by mailing one to me under the guise that it was supposed to replace my ATM card.  But I read the fine print and found that every time I used this new card - even to withdraw my own money from my own checking account - Wachovia was going to write a Visa check for me.  Then at the end of the month Wachovia would settle up all of these Visa checks.  However, each of these Visa checks carried high interest for the whole time they were active - in effect a fee for the bank to allow me to use their ATM to withdraw my money!  Also (in the fine print) Wachovia was going to charge me a monthly fee for having their new debit "service". 


I also read in their letter that I could just cut up the new card and keep using my old card, without any change in service and without fees.  NOT!  Although I never activated their debit card I found its fees on my bank statements.  I had to call and complain every month to remove those fees from my account - every month, despite each time being promised that the "service" was cancelled. 


They tried to force me to accept their debit card, and eventually I closed my accounts and went to another bank. 

Dec 3, 2012 4:21PM
If you have insurance that covers a rental car, a rental car company cannot sucessfully collect  ANYTHING from you. Do not be intimidated.  Do not panic and pay for a lawyer.  Simply get proof of proper insurance from your insurance company and conformation  that they have paid the claim.  Then add a cover letter saying you refuse to pay  anything and that they must either stop harassing you or immediately file a lawsuit for their 'Loss of use" or diminunation of value" claim.  Send your letters registered. They will not file the lawsuit, if they should, it will be defendable by yourself in small claims court.  Again, do not get shook by the phone calls, they are being placed by an outside company working on commission.
Dec 3, 2012 5:04PM
I live in California, and we are given lists of school supplies our children must buy before the school year.  I'm not talking about pens and pencils, I'm talking about paper towels, hand sanitizer, and other general classroom supplies that should be provided by the school district.  What are my taxes paying for?  The answer: teacher pensions and not basic school supplies.  Absolutely ridiculous.

Also in this category is every crappy thing my kids are forced to sell.  Again, why are my kids being turned into the school district's door-to-door salesmen (child labor).  I refuse to do it, but the school district gives me an opt-out, I can pony up more money to "buy-out."  This is ridiculous!  Teachers work 3/4 of a work day,  have 3 months off in the summer, two weeks in the winter, a week for Thanksgiving, a week in the spring, and every holiday ever imagined in between, and they are higher paid and have better benefits than those working 8 hours a day, 5 days a week.  Let the teachers use their afternoons to sell their crap door-to-door to support their own damn bloated pensions!!!
Dec 3, 2012 8:15PM

A Fee by any other  Name is Still a TAX! Use your wallet and BOYCOTT these COMPANIES !


Why are we so STUPID !?

Dec 3, 2012 5:39PM
One thing that really frosts me is paying school taxes when you do not have kids in school. That's the way it is here in New York state. Only property owners are paying school taxes yet everyone can vote on the school budget. I say if you don't pay the tax, you have no say in the budget. But then, if NY could figure out a way to tax air...they would. I realize this is a bit off subject, but it is a ripoff just the same.
Dec 3, 2012 7:18PM

I have a timeshare loan through Starwood Vacation Ownership (Starwood Inc.) that I stupidly invested in several years ago. I was young and didn't understand interest rates at the time so not only am I still paying for this at a ridiculous interest rate, they have just started charging a $4 monthly fee just to pay the bill (with no notice going out to consumers btw, I just noticed the increase in my payment.)  


It doesn't matter how the bill is paid- check, direct debit, ect.. they decided to charge a "service fee" to pay the bill regardless. How is this legal?!!? Never will I recommend Starwood again... (Starwood's brands include Sheraton, Westin, W Hotels and Le Parker Meridian if you are interested.)

Dec 3, 2012 4:46PM
I have never understood why airlines do not include those extra fees, i.e.
Segment Fees:
Fed Tax:
9/11 Security:

Carrier Usage Charge:


They are going to be included in all flights, just add them into the price and STATE the price.  As far as Allegiant and paid bags and paid carry on, it is getting real old, real fast.  I just flew US Airways and United where there wasn't  a carry on fee, whoooo hoooooo


I know it is not just the airlines only that have these fees, look at your phone bill, cable bill, there are always these taxes and why they aren't added in from the start has always been annoying to me.


Does anyone have a good explaination as to why these business do not include those fees in the pricing from the start?



Dec 4, 2012 10:05AM

Verizon just added a fee - if you pay your bill at the local store (gas/telephone/electric) which many stores still do, Verizon wants to charge you 2.50 to pay that way.


I took my check back and said thanks, for 2.50 they can wait for the mail and it's 46 cents!

I would think that getting it SOONER rather than later would be a good thing


Nope - what morans.

Dec 3, 2012 8:51PM
one fee thar really seems like gouging is charging my bank account for a returned check that someone else has given me.The person who gave me the bad check ls already being charged for writing the check that is being deducted from my account and I cannot see that I should be charged with anything.  Is this legal?
Dec 3, 2012 6:06PM
At the beginning of 2001, a jerk whose wedding I was organist for wrote me a hot check, the bank returned it, and I GOT CHARGED for cashing it! It was on my statement ALL FREAKING YEAR, and while the fellow who wrote it did tearfully apologize (and, believe me, pay my **** back in cash!), the bank acted as though it was MY fault when it freaking was not!
Dec 3, 2012 5:45PM
My car loan was bought by Santander.  If I want to pay online I have to go through Western Union and pay $15.95.  How come everyone else has figured out how to set up direct deposit through their website?
Dec 4, 2012 8:12AM
In some states you pay sales tax when buying a new car. Then every year after that you pay personal property tax or usage tax for as long as you own it. In West Virginia this usage tax applies to any item you own that is motorized that you can ride. Lawn mowers, 4 wheelers, go-carts, and many more. We are taxed literally to death. Death is the only way we stop paying taxes but then our Aires get hit with the death tax or inheritance tax.
Dec 4, 2012 10:20AM
Since I live out of state from where I initially set up my credit union account...My credit union wanted to charge me $9 to send me my own money from my account.   After 32 years with this credit only took one executive decision from some yahoo at the top of their orgainizaion  to make me close account and find a new credit union. 
Dec 3, 2012 7:33PM
my bank charges a hefty fee for over drafts. Sure, I know I need the money inb my account to pay for the check I have written, but because of a 60 cent mistake-yes on my part-I was charged $35.00. Seems like they could cut us some slack. And to top it off, the witch on the phone said "You need to make sure you have money in your account" REALLY!!! Oh well, the joy of being poor.
Dec 3, 2012 11:09PM
Where is PayPal on this list?  Their option of using a back-up method of payment is misleading.  A few years ago, I wanted to pay for something online with my credit card, but for some reason they picked my checking account as the default setting, stating that my credit card would be charged if my checking didn't cover it all.  And since their interface didn't give me the option to choose "Pay WIth Credit Card" at that time, I went with it, thinking that it would be charged to my card either way.  What they don't tell you is that they wait for your bank to bounce it, hitting you with NSF fees and PayPal's own enchanting fees before they'll resort to your back-up payment method.  I was overseas at the time, otherwise I would have just gone to the bank and made a deposit since I had enough cash to cover it all.  There was already a transfer in progress from my foreign account to my American checking, which always takes a week or more so I should have waited.  But no, I decided to believe PayPal's "We're so safe, fast, easy, reliable, and wonderful which is why everyone loves us" claim, and I got burned.  I called PayPal's customer service and complained about it, and sent them screenshots of their pages showing that they greyed out my credit card and made it unselectable.  They told me that they were wonderful for "shouldering the burden" of my transaction, and they refused to acknowledge that they failed to mention the whole check-bouncing part of their backup plan.  Finally I got someone in America on the phone who understood that I wanted to pay with my card in the first place, and he promised to "pass on a note to the IT department about the glitch."  Yay for me.  I HATE PayPal.
Dec 3, 2012 6:25PM

Account xfer fees from brokerage firm to brokerage firm.


Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.