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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 4, 2012 12:45PM

What I can't understand, there are a lot of individuals out of work, such as myself for two years now, because there are no part-time jobs, but these companies hire individuals who just don't know what their doing, or don't care. They don't pay attention, they don't listen so either the customer pays the price or the company pays the price for the stupidtiy of another.  I live on limited disability income and as that below of my purchase with Best Buy, my mortgage payment will also be charge a bank fee of $25 due to that clerk overdrawning my account. Though I have overdraft protection, up to a limited dollar amount, the bank fees dug deeper and deeper into my account until my next months deposit of my disability, some checks were returned due to NSF, because now that my account was overdrawn by some $225 in bank fees I was also charged another $25 for each check returned for NSF and I had just enough money at the beginning to make the transaction of that hard-drive.


Some people are sickening to me.... the bank wouldn't do anything about it and the store wouldn't do anything about it either as the bank told me: you gave them your debit card it's your I suppose to show these people how to do their job??  Makes no sense at all, and if that were the case the comany who hired them should have hired me, at least I would have been more careful at what I was doing.

Dec 4, 2012 12:41PM

The most irritating fee I've been charged lately is a transaction fee when I use my ATM card as a debit. I don't get charged if I use it as a credit. I shouldn't have to pay the credit union to use my own money. I usually use it as a credit, but sometimes I need cash back and I can't do that as a credit. I have all of my accounts with this credit union: Savings, Checking, Money Market, etc. and they are going to charge me? If it wasn't such a hassle, I would change credit unions.

Dec 4, 2012 12:35PM
These charges will expand and grow every month because they can, and they get away with it !  Every new MBA needs to show a company how to increase revenue to pay his/her salary, and the CFO's like to come up with these charges to show why they should be the President or CEO. Unless there becomes a strong organized pushback by consumers just watch it happen, and hold on to your wallet !
Dec 4, 2012 12:34PM
texting fee should also be on this can use yahoo instant messanger or the msn messanger and do the same thing for FREE.
Dec 4, 2012 12:31PM
I recently closed a bank account with Rabo Bank and was charged $10.00 closing fee!
Dec 4, 2012 12:22PM

A big business government gone wild!

Dec 4, 2012 12:16PM

Life and death insurance, Accidental death, Car, Liability, Registration, Waste, Gas and gas tax  

Carbon tax, Road tax, Fire, Water, License, Sells, Health care, Electricity, Cable, Phone!

Merry Christmas and God Tax!


Dec 4, 2012 12:13PM

I will never purchase another item from Best Buy, only because their sales people don't listen to what you need or want. The counter person swipe my debit card I don't know how many times and over drew my checking and the fact they bought me the wrong item because they weren't paying any attention to what I wanted, example: I wanted an internal hard-drive, they bring me and external, so when I pointed this out I finally got the internal, but the difference was also charge to my checking that was overdrawn, I got slapped by the bank for $200 in overdraft fees due to a clerk error.


Instead of voiding the mistakes they only reversed what they did, but the fact the charge hit my account and not the credit, I was charged $25 for each mistake and the internal drive ended up instead of $59.99, costing me $100.99, $25 from the bank for the wrong drive and another $25 for the difference in price.


What is this world coming to??

Dec 4, 2012 12:04PM
Most insulting fee I was asked to pay was the cable company when I wanted to change the name on my account when I got married. They want to charge me a fee to change the name to another person... and the forms all want name of person A transferring the account to Person B, but there is only one of me, I am still the same person, only one of me, count how many you see ........ so, after 4 tries I left it in my maiden name, the bill still comes and I still pay it........  I also baulk at paying school tax for people over 65 it should be based on a sliding scale of age and income. So, that's my gripe for the day......
Dec 4, 2012 11:54AM

Social security tax that you never will see, even when they tell you you’re living longer!

Dec 4, 2012 11:49AM
Spousal fee.....  If you are married and you have your spouse on your insurance, you are paying an additional $100.00 a month to have them insured.  Now of course, that fee won't apply if his job doesn't offer insurance, or not employed.  Need a second job just to keep up with the fees and additional taxes we have to pay...
Dec 4, 2012 11:44AM

Once you get into an interest you can’t pay and is compounded with late fees and over charges you pretty much work for that master, he could care less if your electricity is shut off or you can’t put food on the table! Only in America can you own a home that you will never pay off! Once you’re a home owner they own you and your offspring, that’s when these fees really start coming out of the wood work Yes! you own your home but who owns you!

Dec 4, 2012 11:40AM
The worst I've ever experienced was with US Banks over draft fees.  Back in my college years living on not very much I made a mistake with my checking and went over by $10 but on 3 different things. That racked up $30/day on each 3 things for like 3 days and then so much a day after. So I ended up owing 100's of dollars for a burrito and a gallon of gas from the gas station and a loaf of bread from the store.
Dec 4, 2012 11:24AM
'Am I being too hard on these businesses?'
Maybe not hard enough.
We used to have at least a little consumer protection,  but now all we have are internet articles warning us.
Dec 4, 2012 11:07AM
I think the worst one out there are the convenience fees charged by ticketmaster etc.   Why should we have to pay when the use of ticketmaster online is cheaper for the venue and ticketmaster.  To no longer need people actually manning box offices at all hours or in store kiosks like ticketmaster used to have should lower the price of a ticket and/or fees.
Dec 4, 2012 11:04AM
We recently stayed at the Hilton on Marco Island, FL. and they charged $10/day for on-premises self parking (14/day valet) and $10/day for wireless internet! Such bs! But the place is VERY nice. Just use your smartphone and skip the internet. Or, they have a business room with free internet and printing for airline check-in and checking of email, etc.
Dec 4, 2012 10:57AM

One fee I have a problem with is the "shop fee" at an auto repair shop.  Dealerships charge (especially) charge $80 - $120 labor per hour.  Many times you are charged an hour, the repair actually takes the mechanic about 15 - 30 minutes.  Then they want to turn around and charge up to 10% of the bill as a "shop fee."


My "favorite" time this happened was once when my wife's minivan needed a major service (timing belt), tires, brakes, and a few other things all at the same time.  The bill came to just under $2000 (literally a few cents under).  Over $2000 they "waive" the shop fee... instead, a charge of pennies less than $200 appeared on my bill.  I asked to speak with the service manager.


He was very polite and proceeded to "explain" to me that the shop fee covers the overhead of the shop... acetylene torches, etc.  I, then, "explained" to him that a) that "overhead" is built into their exorbitant labor charges and that I doubted they were paying their mechanics, service writers, etc., over $100 an hour and b) not a single repair to my car required the use of an acetylene torch and, even if it had, it wouldn't have required $200 worth of gas.  The charge was bogus and if it weren't removed I'd contact the state's consumer protection division.


I've paid fixed-fee shop fees before (usually about $10), but they are ALL ways just to pad the bill.  This is a repair shops BUSINESS!  It would be like going to a restaurant and paying extra to use a fork.

Dec 4, 2012 10:33AM
I discovered that even if you do not use the Internet access/mini-bar/spa/gym, etc. you are still charged for it in many hotels. I had to file a comlplaint with the home office of one hotel and got my money back, but that was extra work for me to fix something that shouldn't have been in place initially.  Some hotels even charge a concierge fee which you pay even if you carry your own luggage to your room.
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 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.

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