You give 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.
Now, in no particular order, here are 10 of the world’s most insulting fees, along with ways to avoid them. 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.
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 obviously include luggage. Isn’t that an integral part of traveling long distance? Other travel-related services — buses, trains, hotels or rental cars — don’t charge for luggage. This isn’t a fee, it’s a sophomoric attempt to disguise a higher price.
Workaround: There are two major airlines that don’t charge this insulting fee: Southwest, which allows two free bags, and JetBlue, although it allows only one. Fly them if you can. If you can’t, check this chart or one like it to see how much your airline is charging. It may serve as incentive to pack light.
Some airlines also allow you to avoid baggage fees by using their branded credit cards. For more ideas, see 10 Tips to Save on Baggage Fees.
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. Spirit and Allegiant are two airlines that do it.
Workaround: Avoid flying Spirit, Allegiant or any airline that charges for doing nothing. If they’re the only airlines available, drive. If that’s impossible, check with UPS or another freight carrier about shipping bags.
3. Lap fees, pet fees: If you have a child 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 percent of the ticket cost. And not the cost of your ticket, the cost of a full-fare ticket, the most expensive available. Delta, United, US Airways and American all have some form of this policy, and for what? The airline is performing no service, giving no extra room and no assistance — nothing.
Ditto 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 pay up to $125 each way, and the pet carrier counts as a carry-on. 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. Check this article for more specific strategies on lap fees, and this one for flying with pets.
4. Collision Damage Waiver: This is the pricey insurance replacement you’re hammered with whenever you rent a car. If you’re not fully insured in rental cars, some type of protection is absolutely necessary. But this waiver 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 that costs $14,600 a year, with lousy coverage. For example, CDW often refuses to pay if there’s an unauthorized driver, you’re intoxicated or in other situations.
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; don’t leave home without knowing them. 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 is outrageous. Big banks borrow from the Federal Reserve at close to zero percent, then lend money to credit card users at 15 percent. 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.