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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 9:44AM

Thank you for this article. My family and I don't travel often, so we're not market-savvy. Book marking this one.


And NO you're not being harsh on these businesses. There's quite a difference between earning an honest profit and smacking your customers - who pay your bills - right in the face with a scam. I'm sorry...with a "fee."

Dec 4, 2012 9:25AM
My question is :if the bank do not pay the creditor who originate  the automatic withdrawn on you account and the bank dos not paid for insufficient fund but still charge you with overdrawn fee ,
is that fee legal? because if they did not paid why they charge a over drown  fee. Over drawn protection is  for overdrawn or not?

Dec 4, 2012 9:12AM

Here is another annoying charge by Sirius/XM.  They charge you a $2 "invoice fee" when you receive a paper invoice and pay by check.  I send them a check in the amount for the yearly service and include a note that I am not paying the $2 invoice fee just because I choose to pay by check and if they don't want to accept the payment minus the $2 then they should tear up the check and I will, gladly, cancel my subscription.  The subscription is a want not a need and I can do without it.  They always accept my check minus the $2 fee.

Dec 4, 2012 9:06AM
Another annoying fee, one that was presented to me this past summer is the following:  When I had to place a service call for my air conditioner, added to the bill was a "fuel surcharge fee" of $9, something I was not told about upfront.  When I questioned why do I have to pay for the  business's fuel to come to my house (it had already cost me $119 just for them to show up at the door) I was told that whenever gas hit $3.50 a gallon or more, the charge would be added.  Notice that they didn't answer the question of why it's my responsibility to pay an extra $9 (in addition to the $119).  And the $119 did not include any work that they did (they cleaned sediment from a pump which took less than 20 minutes and I was charged for that.  So I received nothing for the $128.
Dec 4, 2012 8:47AM

My wife and I will be going to a concert tonight, a small venue atmosphere.  I paid for the tickets to see the performer.  That's fine, of course.  On the ticket is printed that a minimum of $10 has to be spend on drinks.  I paid for what I am getting.  I'm not paying for something I don't want.  What are they going to do?  Charge me  $20  for purchasing nothing?  It will be tossed if I'm presented with this.

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 2:33AM
So if the airline doesn't successfully "deliver your checked luggage safely back into your hands" do we get a refund for the checked baggage fee? Or what about a refund for any other of these fees if the services they pay for dont deliver?

Dec 4, 2012 2:19AM
How about restocking and processing fees from companies like Telebrands? Nearly $15 was deducted from a refund for an infomercial item I was dumb enough to order, with Telebrands citing restocking and processing fees.  
Dec 4, 2012 1:11AM
My debit card was recently hacked by a company in England trying to put thru charges.  Thankfully the credit union called to ask me about it before they approved it.  I had to have that card cancelled.  It takes 7 to 10 working days to get a new card.  In the meantime, a number of bills that I pay monthly with my card were coming due.  I called them with the new card when I got it wanting to make my payments and change the number on file.  One credit card company wanted to charge me 14.95 to process the payment over the phone!  After I protested to a supervisor, the fee was waived.  The cable company wanted to charge me 10.95 to have someone take my payment.  I explained what happened and they also waived the fee.  These are companies that I have been with for more than 10 years, I was not aware that they can now charge you for making payments if a "live" person helps you.   Whatever happened to customer service?  Another one is a sign I read in a doctor office, 25.00 to fill out paperwork for industrial, auto and disability claims. They claim it is for the doctors time, staff completes everything the only thing the doctor does is sign it.  They also charge you 5.00 if you do not pay your bill or copay at time of visit and each month there after until the bill is paid in full.   The person who has a 2000.00 deductible and has surgery usually needs to make arrangements to pay that off.  The 5.00 per month on top of interest charged is rude.   Last one is the gratuity automatically added to the checks at restaurants.  What if your service was bad?  These days it averages 20% of the bill.  Also, adding the gratuity automatically if you have more than 6 people in your party.  This happened to a coworker, the seventh person in their party was an infant still on a bottle that ate nothing from the restaurant. They complained to the management and it was taken off.  Why is it automatic if you have 7 people instead of 6?  How much more work is it for a party of 7 or two parties with 3  and 4 people who do not get nailed with an automatic tip?
Dec 4, 2012 12:27AM
Sovereign Bank charges a fee for cashing a check drafted on their own bank if the person it's written to doesn't have an account there. How can that even be legal?
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 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 9:39PM
CDW - I would strongly disagree on this, mainly because the example given is super extreme and not applicable to 80% of car renters out there.  Is it expensive? Sure is. However, CDW isn't designed for you to have 365 days a year. It is EXACTLY what it says - it is a waiver. Think of it as a "waiver of financial obligation" to the rental car company - including loss of use (depending on the rental company - this varies some). Typically, as long as there is no negligence on your part (drunk driving, drugs, unauthorized driver) you can walk away (legally) with little to worry about.

CDW is designed for someone who rents a car for 1) 5 days or less per year, 2) traveling outside your familiarity (like when I go to Disney World or downtown Chicago for a day, etc), 3) have a high deductible ($500 or more). If a rental car gets dinged, it is eventually getting fixed by the rental company before they sell it. If you or I get a ding on our own car, we probably don't worry about....because we don't have to.

As for credit cards, the other HUGE thing this article missed is if a car is damaged and you want your credit card to "cover it" there are WAY more stipulations than what this article mentions - usually they cover it AFTER a certain dollar amount is exceeded (like greater than as high as $2500 sometimes) AND you have to pay for the entire rental on that credit card. Sometimes people secure their rental with a credit card, but then settle up with a debit card at the end - well, so long credit card coverage. They will look to get out of paying as well.

In summary, the questions to ask yourself, "Is it worth $100 for 5 days on a car I don't own? Is it worth risking my OWN insurance policy standing for somebody else's car, especially when after a claim is filed against my own policy it (usually two claims against your policy) will risk your rates going up (10% on first one with State Farm for example as 1/3 drivers has SF, and as high as 40% after a 2nd claim - they don't explain this to you typically).

At the end of the day, its about how much risk you want to assume. I know I'm a good driver, but it is the idiot out there that doesn't pay attention and hits me and takes off that makes for a really, really, crappy day.

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 8:21PM
Boc cutters were allowed on planes pre 9/11, so security didn't miss them, they weren't banned. Andf TSA didn't miss  them , TSA didn't exist then. 
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 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 7:23PM
pet fees on airlines - dealing with customer complaints, possible rejuggling because of allergies. you're paying for the potential work they may have to do
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.)


what about the Dennys adding an obama healthcare fee ? companies charging $2-5 to just pay your bill with an agent but also cahrge late fees due to late payment, as long as everyone pays these and just chalks it up as business as usual then companies will continue to charge whatever fee they can finegal up, just like the  9/11 security fee on all tickets now.. since the tsa coudlnt catch 19 middle eastern men going through metal detectors with a few box cutters? i mean not 1 was caught at a metal detector witha metal box cutter? how did the 4 or so with box cutters get through?





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