“As the economy sputters, more companies are nickel and diming their customers into the poor house. If you don’t want your pockets picked, you must be exceptionally vigilant and avoid getting overcharged for ANYTHING.”- Eric Hutter.
Precarious financial times mean upticks in crimes such as shoplifting and identity theft. A shaky economy also sees the proliferation of hidden surcharges and fees by companies looking to prop up their bottom lines. Add-on charges levied by banks, finance companies, brokerages, hotels, gas stations, energy providers, and many other companies can leave a dent in your budget, especially if you are already retired.
Banks often tout their accounts as being “free.” They don’t mention that the majority of these accounts are stuffed with often-obscure fees. Free checking accounts may include wallet-draining add-ons such as overdraft fees, ATM fees, administrative charges, and charges for paper statements, among others. What’s worse, these expenses keep increasing. For example, in 2022, the average overdraft fee hit levels as high as $33 per overdraft!
While it’s still possible to find banking services with lower fees, add-on charges have generated so much revenue that even consumer-friendly institutions are rushing to grab the cash cow. That’s why you must become your own financial auditor, taking time to do the math to ensure you are not charged unreasonable and unnecessary fees. For pre-retirees and retirees, who already feel the pinch of inflation, avoiding unnecessary expenses is more critical than ever.
“Hidden” credit card and ATM fees
Many banks these days seem to regard their customers with disdain and disrespect. Not only are banking clients experiencing branch closures, longer phone wait times, and overall poor customer service, they are often charged for the privilege of speaking to a live human being.
Banks have pushed their customers to opt-in for electronic statements, sometimes charging fees to send paper copies. However, if you only have access to online statements, you may want to switch back to paper statements. Going back to paper is one way to ensure you aren’t paying more in fees than necessary.
Recent studies indicate that it is much more likely for consumers to overlook add-on fees and incorrect charges with electronic accounts. Seeing your account overview on a large sheet of paper versus a tiny phone or tablet screen makes it easier for you to catch and potentially reverse fees from the bank as well as from the companies with whom you do business. If you find charges you do not recognize or excessive fees for overdrafts or cash advances, don’t think you are always stuck paying them. Many times you can have these charges reduced or refunded. Be sure to talk to your bank.
Cable television and cell phones
According to Consumer Reports, nearly 70% of Americans with cable television services reported unexpected fees. These fees add, on average, 24% to your bill. You may be aware of the $7-$15 a month fee charged by many cable and internet providers for equipment rental. Many cable companies also charge what’s known as a “broadcast TV fee.” This surcharge ostensibly helps defray costs paid to local networks. Such fees can add anywhere from $4 to $12 a month. There is also something knowns as a “regional sports surcharge” that could be added to your bill, even if you never watch sports.
Is there a solution? The only sure-fire way to eliminate cable surcharges is to get rid of cable altogether. With so many entertainment delivery options available these days, you are no longer at the mercy of your cable provider. You can find alternatives that are easier on your budget. Seniors can often find deep discounts on equipment and service and low-income people might even qualify for free phone service. The same applies to cell phone providers.
Bottom line: As the economy weakens, businesses ranging from hotels and restaurants to utility companies are tacking on additional fees. Unfortunately, with all the chaos in the world, giving your statements and receipts additional scrutiny may seem overwhelming. However, since so many hidden charges and junk fees are buried in your monthly statements, greater attention could pay off in terms of “found” money you can save or invest. Don’t be afraid to challenge service providers and banks and question any charges you don’t recognize. Ask for refunds whenever warranted.