Unreasonable fees are more than just a drain on your finances. They’re insulting — the financial equivalent of a cold slap in the face. Such fees share three qualities:
- They’re unreasonable.
- You get little or nothing in return.
- They’re ridiculously overpriced.
Following are 10 of the world’s most insulting fees, along with ways to avoid them.
1. Checked baggage fees
Our first three unreasonable fees all have to do with airlines. Major airlines often charge baggage fees — typically $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 distances? Other travel-related services — buses, trains, hotels or rental cars — don’t charge for handling luggage. This isn’t a fee, it’s a sophomoric attempt to disguise a higher price.
Virtually all airlines now charge a fee for checked baggage on domestic flights, with the notable exception of Southwest, which will allow two checked bags free, so long as they are within regulation size and weight.
When you are looking at fares, check this chart or one like it to see how much you will pay for your luggage on top of airfare.
Most airlines allow one free carry-on bag, so the simplest solution is to get a regulation-sized carry-on and pack light. Also, some airlines waive baggage fees if you use 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. Airlines that charge a fee for your carry-on include:
- Spirit Airlines: $37-$65
- Allegiant Air: $15-$25
- Frontier Airlines: $30-$35
So, you can either avoid these airlines, or just be sure to factor in the cost of bags to see if the “cheap” airfares they offer are really a good deal.
Also, check with UPS or another freight carrier about shipping your bags instead.
3. Lap fees/pet fees
If you’re taking a child younger than 2 with you on a plane, it’s typically free to hold 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. You pay the fee despite the fact that the airline is performing no service, giving no extra room and no assistance — nothing.
Expect the same when you’re flying with Fido. Bring a pet with you into the cabin, and you’ll pay as much as $175 each way. To add insult to injury, the pet carrier counts as a carry-on. Again, the airline is doing nothing but collecting a hefty fee.
To avoid such fees, check with the airline before you book the ticket to see if the carrier will charge you.
4. Rental car collision damage waiver fees
This type of 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 an auto policy that costs $14,600 a year.
In addition, you get lousy coverage for your hard-earned dollars. For example, a collision damage waiver often will not pay if the car is driven by an unauthorized driver, or if you’re intoxicated at the time of the crash.
A workaround: If you have full-coverage insurance on your personal car, you’re probably covered when you rent. But check with your insurer to be sure. Some credit cards also offer coverage, although they do not always cover pickups and vans.
Even if you have insurance on your car, you can still be on the hook for “loss of use” claims by the rental car company. Such claims arise when you have an accident that takes the car out of service for the rental car company.
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 zero percent, then lend money to credit card users at 15 percent. Nice work if you can get it.
The obvious solution here is to avoid interest by avoiding a balance — pay your charges in full each month. But if you’re going to pay interest, shop for a card with a lower rate.
6. Foreign transaction fees
These fees are charged on credit card purchases processed outside the United States — for example, when you use your card in Europe or to buy something from a non-U.S. company. Banks that charge them typically collect 3 percent of every transaction.
If you’re planning foreign travel, bring a card that doesn’t charge this fee. There are plenty to choose from.
7. Overdraft fees
If you overdraw an account and the bank uses its money to cover your negative balance, it deserves to be compensated. But how much? Overdraft fees often cost in the neighborhood of $30 to $35 nationwide. Charging $34 for a one-week loan on the average overdraft of $36 equates to an annual rate of 5,000 percent.
To prevent incurring such fees, link your savings account 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
Banks charge all types of unreasonable fees. If your account falls below a specified minimum balance, you’ll be charged. Want a paper statement? It will cost you. Use another bank’s ATM, and you’ll pay a fee.
There is 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.
Check out: “How to Pick the Best Credit Union for You.”
9. Resort fees
The concept of paying to stay at a hotel and then paying more to use on-site amenities is ridiculous. Such fees may be assessed for people who use exercise or pool facilities, or who log on to the internet.
Before you book a reservation, find out in advance what fees you’ll be expected to pay. If you hear something you don’t like, just say no.
For more, read: “12 Tips for Avoiding Ridiculous Hotel Fees.”
10. Internet service charges
When the internet and Wi-Fi were new, perhaps it was justifiable to charge a fee to access them. These days, charging for internet access makes as much sense as charging for the in-room TV or air conditioning.
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 hot spot. Free apps available for iPhone and Android will help you find one.
What’s the most annoying fee you’ve paid? Sound off below or on our Facebook page.
Ari Cetron contributed to this post.