I hate seeing people get taken advantage of, especially when they don’t even know it is happening. Sure, people are responsible for their own decisions, and should take time to evaluate where their money goes. But, not everyone thinks Personal Finance is a sexy as I do, and no matter how hard I try Mrs. AE isn’t cozying up with our 401K statement tonight.
While I would love to ignorantly believe that everyone handling your money has your best interest in mind, the truth is consumers are preyed upon. Companies can hide behind complicated legal nonsense and slap a fee on your account for a ton of insane reasons.
The good news is, you don’t have to put up with it. Set some time aside to track this crap down and nuke it. Keep everything you can by stealing back from the rich. Robin Hood style.
Ready to find out if someone is stealing your $
Thieving Banks
Banks are the king of inventing fees.
- ATM Fees – Slowly seem to be coming a thing of the past but consumers are still paying a S.T.U.P.I.D. amount of money. Check it out if you don’t believe me: America’s 3 Biggest Banks Collected $6 Billion in ATM and Overdraft Fees in 2015
- Over Draft – Part of me says “you should know whats in your account” but, $35 for a few hour loan is bull. Cancel your overdraft protection.
- Account – Checking and Savings accounts should be free, and some are. So if you are paying a monthly fee to have a simple account, Ditch it now.
There are a ton of online banks killing fees and giving you easy access to your money through out of network ATMs.
Proof! Here are some Checking Accounts with no Monthly or ATM fees and low balance requirements. You can adjust the zip code and other requirements to find something that fit your needs.
Interest Rates
- Credit card – Credit Card rates are criminal, protect yourself and pay them off every month like a champ. Or don’t use them.
- Savings Account – .05% baby! You can double your money in about 1,440 years while the bank loans it out for 100X that amount (at least). Please get rid of your brick and mortar savings/emergency accounts and move them to an online bank.
Proof! Here are some Savings Accounts with low fees and over a 1% interest rate! It wont make you rich (unless you already are) but it sure kicks .05% in the pants.
Investing Fee Monsters
Expense Ratios
I hate expensive funds, particularly in retirement accounts.
If you are unfamiliar with Expense Ratios, a very basic definition is how much you are paying every year to own that particular fund. The money goes out win/lose/or draw. Regardless if they beat the market or not, this is their cut. Unfortunately, people pay these fees without even realizing it.
When I reviewed my 401K funds last year I was pretty disappointed with some of the fees in the mix. Chances are if you selected a pre-built 401K allocation you are stuck with some expensive funds that aren’t even keeping up with the broad-based index they track.
I go further in-depth on expense ratios in my Beginners Guide to Selecting Your 401K funds post
Personally I think employers should take more responsibility for vetting the funds available to employees, but that wont happen, so it’s on you.
Trading Fees
Some firms charge $20-$35 dollars to make a trade, that is 3-5 times more than it needs to be. Technology will continue to disrupt this world and make trades cheaper if not free. Last link to NerdWallet for today – head over and see if you are over-paying for trades.
For a very cheap way to dollar cost average your spare change – check out Acorns (Each of us get $5 if you use this link)
Brokers
I am not a fan of anyone that gets a commission for stock tips or trades. Seek out someone who has a Fiduciary Duty if you are going to pay someone for investing advice. Personally, I don’t use anyone – but if it makes you more comfortable they need to have YOUR best interest in mind.
Shady Service Providers
My Biggest complaint with service companies is the short-term reward new customers get with steadily rising prices over time. They lull ya to sleep and raise it a few bucks every month until you are paying a stupid amount of money to watch TV.
Long term customers should be rewarded, not systematically screwed over because they don’t want to call customer support. Here are a few I have seen recently…
Cable Company – List of fees I have on my bill:
- HD Technology Fee $10.00
- Broadcast TV Fee $4.50
- Regional Sports Fee $3.00
- Franchise Fee $5.84
- Community TV Fee $1.43
- FCC Fee $0.08
Holy crap! I shouldn’t have even looked at this. What is a community TV? Good thing we are cutting the cord (kind of) this month and I can stick it to the man! Will let you know how it works out.
Also, don’t rent modems – it’s a scam. You can buy a comparable one for half the price over renting one.
Airlines
We had to cancel a week-long trip in April because Mrs. AE probably shouldn’t fly when she is 8.5 months pregnant. Turns out we were rewarded with a $200 change fee, and a $30 Administrative fee Per Ticket. How dare we expand our family!
I wanted to keep fighting, but after 40 minutes and 4 different people I was over it. Battle for another day I guess.
Other places I see fees or steady price increases with no rewards for being a long-term customer – Cell Phone Providers, Internet providers, Housing Association and even garbage collectors.
Shockingly our insurance companies have been pretty good over the last 2 years, but I know that isn’t always the case.
Take Aways
Technology is disrupting the old fee structure, but people are not adopting fast enough and continue to get taken advantage of. Don’t be one of them.
I may not have covered everything, frankly there are way to many ways for you to get hosed financially. Go through your investment accounts, banking accounts and service providers and figure out who is dipping into your money pot.
Feel free to throw anything I am missing in the comment section for discussion!
Image from http://www.memecenter.com/
Great points here – there are so many little ways we get taken by fees. My latest outrage is that AT&T is raising the prices on their unlimited data by $5 per month per line. So an extra $120 per year. How dare we have been customers since 2009! Of course, they want to make more money off us by having us switch to a different plan, and rent phones instead of owning them. Jokes on them-as soon as my husband is out of contract in March I’m switching providers. I’d rather have that extra money in my pocket every month.
They take take take and never give back! Taking advantage of long term customers is a joke! Glad you are going to take your business elsewhere – its the only way to fight back.
No freakin’ kidding. The one I’m most upset about right now is my water bill. It’s freakin’ $70 a month. FOR WATER. We’ve asked around and other people in the neighborhood are seeing similar water bills. It doesn’t appear to be a usage issue, either. It’s all these random $5 and $10 fees tacked onto the bill. The most horrible part is that we can’t *choose* a water supplier, so they have a monopoly over the whole area.
AGH.
Love this post, AE! Great suggestions. Those extra fees and charges certainly do add up. I have two bills that are way too high and I can’t get them lowered.
Like Mrs. Picky Pincher, our water bill is really high (usually around $100). We are on rural water and only have one option for a supplier – they have mismanaged in the past and we are paying for it. Cutting back on usage helps a little, but where they get you is on the fees and service charges.
Insurance is another one that is sooo high for us. Auto insurance with a teenager (soon to add another) is outrageous. Even with good student, multi-line, and accident free discounts. And they raised our rates by about 15% this year. We shop around each year, but can’t find a better price.
The expense ratios – that’s one of those “I wish I knew then what I know now” things for me. We went through the 401k about 3 years ago and switched to lower cost funds, but we had been paying way too much previously since we weren’t paying attention. Better late than never, I guess.
Thanks Amanda! –
Definetely better late than never on the expense ratios/fees – glad to hear you dominated them. – 15% is a HUGE increase on insurance!
This is one of the reasons why I prefer using my local credit union for routine transactions. No fees + interest on even my checking account. Nerdwallet is a great resource to find a better option to put our emergency funds.
Thanks for the great info and reminding us to be diligent!
Love NerdWallet – They have a ton of great accounts for Emergency Fund Storage. Might as well make something.
Thanks for comment!
Many people lose so much of their paycheck to taxes, bills, and other expenses that we they hardly afford to let even more institutions get their hands on what’s left. Thanks for the list – I’m going to link to it from one of my more recent posts (Keep The Money You Make).
Appreciate it Ty, I didn’t even touch on the biggest thief of all! The Government!
So true! I have $7200 is savings with Wells Fargo and for the past 4 months (when I began saving) I have only accumulated .01%. I’m thinking of switching to ING Direct or Capital One 360. If any of you has used them please let me know how you like it. Thank you for sharing this great insight!
I use Barclays – but I’m sure both of them are better than what you are using now!
Totally agreed, many of these fees are nothing more than theft. Here in Italy, the regulatory system seems to be very lax and many companies get away with charging stealth fees on many things. For example, a cellphone company that advertises a prepay package at 25 euros per month charges a ‘cancellation fee’ of some 40 euros if you don’t stay on the tariff for 2 years! Or the competitor that slaps a 5 euro ‘activation fee’ on its packages. How about the internet provider that levies a 30 euro fee on any calls you make to its technical helpline if it believes, on its own unregulated judgment, that the issue was more your fault than theirs! And don’t get me started on the banks – there is actually a charge to open an account! ‘Welcome, thank you for your business, that will be 10 euro!’ – fortunately I found a German bank that provides me free accounting instead!
Over in the UK the banks are back in the headlines again over the fees they levy on ATM withdrawals. Every year or two, for as long as I can remember, they try to float the idea of charging customers for withdrawals. I guess they are trying to soften public opinion with a long term view of monetizing it! And they wonder why we give them no respect…
Reading this post made me think of this quote from Warren Buffet, “Rule No.1: Never lose money. Rule No 2: Never forget Rule No. 1”. Interest rates, credit fees, etc. all add up to a ridiculous amount of financial waste!
I love the blog but after reading this post Iām all worked up š – – I go out of my mind when I look at service/utility statements and see the fees that you mention – and for a few you just have to bend over and say thank you keep it coming ([email protected]#$) – – what happens when lobbyists run the government (seven figure paid lobbyists) – these fees make these companies millions if not billions, lobbyists get paid, politicians get paid, consumers get boned – – ok, Iām done š
Thank you! Agreed – consumers get boned, and if you don’t realize its happening – it will keep happening.
Thanks for the reminders about all the thieves out there. It’s truly infuriating. I think that’s why if you catch a bank or other institution in error, not in your favor, you have to hold them accountable and force them to give you a credit or some free service. Because they certainly don’t let you off the hook when it comes to collecting their fees.
Thank Mrs Groovy!
I hear ya, trying to get corporations to correct a wrong with something is a PITA. The government is never wrong, so trying to reason with them is infuriating.
If community TV is similar to what our power company does it’s paying towards whatever tax the government applies to subsidize certain parts of the populations TV. It’s a pass through from the provider to you. In our case our power has a community power fee, to go with a green energy provider fee, a customer fee, a fee for line maintenance, and oh yeah somewhere in there we pay for actual electric and gas.
Interesting, would be kinda crappy that they would pass a fee on to everyone for a non-essential item like TV. I would feel better knowing that small chunk of money was going towards keeping someone warm. Maybe I will look at is paying a few bucks a year so some kids can watch cartoons……
Sorry to hear about your flight change fees. That is very frustrating. It seems to depend on the airline, and you probably pay more on average for the ones with better policies. It is hard though because there is so much in life you can’t completely plan for, like babies, weddings, and funerals.
It also irks me when people act like they are getting free money from their tax return, when really they are missing out on interest they could hard earned elsewhere, or avoided by paying off debt. I know some people like to “hide” money this way and I guess that’s fine if that’s the only way it’s going to happen, but the whole marketing push to get people to spend their tax return on luxuries or things they can’t really afford feels like stealing!
What annoys me the most – the $2 convenience fee for online payments charged by utility companies and government agencies.
Ugh! I hate Xfinity. We don’t have other options, though. Someday…
Good round up of these fees. Brokerage fee in particular is easily avoidable. There is no need to pay more when you can go with a more affordable option like Vanguard or TradeKing.
We don’t have cable tv but have cable internet. I think the cable modem rental fee which all the companies seem to have is ridiculous. Time Warner which is the provider I have…actually I think it’s Spectrum now…charges $10 a month to rent the cable modem. You can buy one for like $60. Probably cheaper if you get a refurbished one. But some people may not know you can do that and that $10 really adds up.
Fees Fees everywhere Fees – Totes reminds me of the Signs song by Five Man Electrical Band (Yes, I had to google it because who the heck knows who sings it??). I try to minimize the impact of fees in my life but some you just can’t get around. Good call on cancelling those flights, though. You don’t want me delivering your baby in the air!! š