Every time you turn around, it seems like there's an extra fee charged for services of dubious value.
While sometimes fees are a necessary evil, when it comes to your money, there are easy ways to avoid paying fees that are unnecessary or easy to avoid.
Make it a rule to never pay for the following eight fees.
1. ATM Fees
Nowadays, you shouldn't ever have to pay money to access your own money. If you find you're paying ATM fees, change banks! There are many online-only banks and financial institutions out there that no longer charge ATM fees. They’ll even refund you the fees you paid for out-of-network ATMs. Two examples are USAA and Charles Schwab.
If you’re still paying for ATM fees, it’s time to shop for a new bank.
2. Overdraft Fees
Overdrafting is when you make a purchase from your checking account but don't have enough money on your account. If you've signed up for overdraft protection on your checking account, your bank will honor your purchase, essentially allowing your balance to go negative. But they'll also charge a big fee for the privilege (usually between $35 to $50).
It's usually a much better idea to decline overdraft protection and not make purchases that will cause your balance to go negative. If you do find you occasionally need overdraft protection, look for a bank that offers free overdraft protection (including USAA and Charles Schwab). If your bank doesn't offer this, check out our options for the best free checking accounts.
3. Late Fees
Many banks, credit cards and other accounts such as loans, charge a late fee if you don't make your regularly-scheduled payment by the due date (plus a grace period sometimes). While it's a good idea to make sure that you've organized all of your bill payments (and set them up on autopay if possible), the good news is that many late fees can be removed.
If you find a late fee assessed to your account, just contact the service provider (bank, credit card, utility, etc). In many cases, they will waive the late fee charge as a one-time courtesy. This is especially true if you have been a long-time customer or if this is the first time you've had a late fee charge. If you do get your late fee waived, make sure you set up the bill to be paid on time going forward so you don't run into the same problem the next month.
4. Annual Credit Card Fees
Watch out for pricey annual fees on credit cards. Many of the best rewards credit cards don't have annual fees, so if you have a credit card that charges one, decide if it’s worth it to switch.
In some cases, a credit card with an annual fee also has benefits that are worth the fee. This might be free checked bags, elite status, bonus points, or an annual hotel free night. If you've done the math and know your card is worth more than the annual, that's one thing. Be sure to check out the best credit card strategies to maximize your travel rewards.
Just be sure you’re not mindlessly paying an annual fee when there are lots of good alternatives that come without that $95 sticker price.
5. Credit Card Foreign Transaction Fees
Another credit card fee to watch out for are foreign transaction fees. Many credit cards charge a 3% fee if you pay in a currency other than your home currency. That 3% fee can add up if you travel often and frequently buy things in other countries.
If you're a frequent traveler, make sure you are choosing a credit card that doesn't charge foreign transaction fees. There are many cards that don't charge this bogus fee, even among credit cards with no annual fee.
6. Credit Card Convenience Fees
Keeping the focus on credit cards, avoid paying a credit card convenience fee. Many places won't take a credit card payment for free and will charge a 2 to 3% fee to pay by credit card.
No amount of cash back or travel rewards will likely be worth paying 3% more than you have to. If you come across this situation, look for a way you can pay with cash or using a bill pay service from your bank instead.
7. Activation Fees
If you’re starting a service like signing up for a new cell phone, you sometimes have to pay an activation fee. In the case of cell phones, you usually need to sign a two-year contract and it usually comes with an activation fee.
Ask the clerk to waive it. They will 90% of the time. If they don’t, threaten to go to the next closest cell phone store. There’s a good chance that the salesperson is motivated to complete the transaction and may gladly waive it.
8. Paper statement fees
Many companies give you the option to get rid of snail mail paper statements. They give you the option to receive your documents and statements via email.
Some companies may charge a fee to receive any statements or notices in the mail. Do your wallet and the environment a favor and sign up for emailed statements.
Save Where You Can
Most of these fees are only a few dollars, but every little bit adds up. You might find it's $5 here, $12 there but before long, you're starting to talk about real money.
Avoiding these small fees is another way to microsave, and you'll be much better off if you put this money towards your emergency fund or other investments.
Editor: Claire Tak
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.