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35 Most Outrageous Fees (From Money Magazine)
By JLP | December 21, 2006
The January 2007 issue of Money has a really good piece on the 35 Most Outrageous Fees (sorry no link yet). What I found funny was that I could only find 33 “outrageous fees” listed. Their list (along with my thoughts on most of them):
BANKING & CREDIT
Over-Limit Fee – Charge too much or withdraw too much and you get socked with a fee.
Foreign-Currency Fee – Fees charged for using banking services while you’re overseas.
ATM Fee – Fees for using other banks’ ATM machines.
Late Fee – Fees charged when your credit card payment is late.
Same-Day Payment Fee – A “convenience fee” charged when you need to make a same-day payment.
Balance-Transfer Fee – Fees charged for switching credit cards
Bad-Deposit Fee – Fees charged when a check you deposit into your account bounces. This is a crappy fee.
Monthly Service Fee – Fees charged on checking accounts that are below a certain balance.
Biweekly Payment Fee – This is the cream of the crop. This fee is charged when you set up your mortgage payment to be paid twice per month.
REAL ESTATE
Junk Closing Costs – Don’t get me started on these fees. These are fees like “processing fees,” “document preparation fees,” and other such silly-sounding fees. I hate ‘em.
Title Insurance – According to the MortgageProfessor, “title insurance is protection against loss arising from problems connected to the title to your property. Before you purchased your home, it may have gone through several ownership changes, and the land on which it stands went through many more. There may be a weak link at any point in that chain that could emerge to cause trouble. For example, someone along the way may have forged a signature in transferring title. Or there may be unpaid real estate taxes or other liens. Title insurance covers the insured party for any claims and legal fees that arise out of such problems.”
MISCELLANEOUS
Phone Surcharges
Carrier Cost Recovery Fee
AT&T’s Tax-Related Surcharge
Property Tax Surcharge
Activation Fee – Associated with wireless plans. These fees are usually around $35.
Penalty to End Your Contract Early – End your contract early and you’ll get charged $175 – $200 (according to Money).
Stores
Gift-Card Activation Fee – I already talked about this one.
TRAVEL-RELATED
Car Rentals
Insurance – Insurance you pay when you rent a car. Some states make it mandatory and therefore it is built into the rental cost.
Excise Taxes – Taxes charged to visitors to help municipalities build new stadiums.
Airlines
Paper Ticket – Paper airline tickets are a thing of the past. If you still want one, you have to pay for it.
Talking to a Person – Want to talk to a real person instead of taking care of everything on the internet, and you’ll pay.
Changing Your Flight – It is what it is.
Reserving An Aisle Seat – Want a special seat? You’ll have to pay for it.
Overpacking – Don’t surpass the 50-pounds-per bag limit. Stupid, stupid fee.
Hotels
Internet Connection Fee – I haven’t run across this fee but that’s not to say that hotels aren’t charging it.
Resort Fee – Fees charged for use of the pool or exercise room.
Automatic Gratuities – No need to explain. A forced tip isn’t really a tip is it?
Package DeliveryFees – Fee charged by hotels to accept a package on your behalf.
Mini-Bar Restocking – HOLY COW! This fee is charged in addition to the prices you pay for the stuff you eat.
INVESTMENTS
Mutual Funds
Excessive Annual Fees – 1.25% per year for an index fund? That’s right! Some mutual fund families charge that much for an index fund. Go with Vanguard!
Annuities
Variable Annuity Expenses – These fees can easily reach 3% per year. OUCH!
Brokers
Transfer Fee – All brokerage firms charge a fee when you transfer your money away from them. I hate this fee.
529 Plans
Annual Expenses – According to Money, the best plans charge as little as .5% per year, while other plans charge as much as 2% per year. Shop around.
Did Money miss any? What fees are there that you can think of that are outrageous?
Topics: Miscellaneous | 13 Comments »
December 21st, 2006 at 3:35 am
You’re thinking of Private Mortgage Insurance. Title Insurance is there to cover you in case something is wrong with the title history that didn’t come up in the title search when you bought the property. So if it turns out that your property is actually owned by someone else, the title insurance should cover you.
December 21st, 2006 at 5:39 am
My student loan lender charges a fee to pay over the phone!
December 21st, 2006 at 8:14 am
I dealt with the internet connection fee about 2 years ago at a hotel that charged for broadband. It was something like $6.95 for 24 hours. Most hotels now have “free” broadband. That just means they charge a little more for the room.
December 21st, 2006 at 9:44 am
How about in some hotels how they charge 75ยข just to make a local call? And yes, I’ve seen internet connection fees as high as $12.95 a day for broadband service.
December 21st, 2006 at 10:05 am
Hotels are Disneylands of evil fees, and oddly, the more expensive the hotel, the more fees they have. My guess is this is because business travelers are using these hotels and their employer is reimbursing them.
December 21st, 2006 at 2:56 pm
“Energy” fees added to various items to recoup the higher cost of natural gas or gasoline. Also the charge to refill a rental car if you don’t fill up yourself. Usually runs at least twice the market price for gas in the same area.
December 21st, 2006 at 4:49 pm
I hate getting charged extra fees when I’m overseas. I use my HSBC ATM card now. Here’s a list of ATM cards with the lowest fees: http://flyertalk.com/wiki/index.php/Credit/Debit/ATM_Cards_and_Foreign_Exchange
December 22nd, 2006 at 10:09 am
I found one broker that doesn’t charge an exit fee..Scottrade.
Brokers Transfer Fee – All brokerage firms charge a fee when you transfer your money away from them. I hate this fee.
They are still very good for small investors..and if you don’t like them, you can walk for free..
December 22nd, 2006 at 10:09 am
Sorry, website didn’t mkae it: http://www.scottrade.com/online_broker_comparison/discount_brokerage_comparison.asp
December 22nd, 2006 at 11:36 pm
Weekly Roundup – 12/22/06
Here’s a quick look at some of the articles that caught my eye this past week…
JLP talks about outrageous financial fees.
Jim wants to know where you stash your cash once you have an emergency fund in place and have maxed out your retirem…
December 23rd, 2006 at 1:21 pm
[...] JLP has a list of some outrageous fees taken from Money magazine. [...]
December 25th, 2006 at 4:01 am
Certain purchase points like gas stations charge a $1, whereas grocery stores pay the fee themselves. Never mind that gas stations eliminated attendants to cut costs, now you pay a fee for the privilege of self-service.
It’s outrageous for any sort of automated or online payment system which saves money for the operator to charge the consumer a “convenience” fee.
April 28th, 2008 at 4:14 pm
america is evil!!!