Everyone has gone through it. A bill arrives, and there’s an unexpected charge that’s going to burn a hole through your budget. Your heart sinks, pulse rises to a staccato, face gets flushed, fists clench, and a few f-bombs echo from the walls.
Sometimes those surprises are unavoidable. But more often than not, regardless of fairness, justice and the like, they’re entirely our fault either because we procrastinated, were disorganized or failed to read the fine print.
Here’s a manifesto to help avoid 10 of the most infuriating fees:
1. Roaming Charges:
Most mobile plans charge roaming fees for voice and data when travelling to the United States. Forgetting this can cost you $1.45 a minute for a phone call, $.75 per text or $6 per MB for data. Countless souls have pleaded with Rogers, Telus and Bell to wipe away hundreds of dollars in roaming charges unsuspectingly accumulated on their latest trip south. A simple way to avoid roaming charges when travelling, is to put your cell phone in airplane mode, and hook up to wi-fi for data (email, surfing, etc…) wherever you can. For calling, download Skype and buy $15 of long distance minutes ($.02/min North America), and you’ll save yourself $1.43 a minute or more!
2. ATM Fees:
It’s frustrating enough to pay monthly checking and savings account fees, while the banks lends out your money for profit. It’s borderline insanity to then pay an additional fee to withdraw your own money. If you are going to withdraw money from an ATM, and it happens not to be on your banks network, withdraw a large sum. To pay a $2 ATM fee ($3.75 if your bank is also charging you), and then withdraw $20 means you’re paying 10%-18% to access your own money. One bank did a study and found that college students at bars, withdrew an average of $20 per transaction 2-3 times in the same evening. Ouch!
3. Foreign Currency Conversion Fees:
Everybody loves racking up their points on their credit card while spending on vacation. What most people don’t realize is that their credit card is charging them upwards of 2.5% in foreign currency conversion fees, on every dollar spent in another in another country, or on a foreign website. So while you may be earning anywhere from 1%-2% in cash back (feeling all smart), you’re still losing 1.5% to .5%, and your bank wins again. The best way to avoid foreign currency conversion fees, is to use a credit card that does not charge a foreign currency conversion fee. In Canada, Chase is the only issue that offers such a card (check out the Chase Marriott Premiere Card).
4. Over The Credit Limit Fees:
Look, I’m not even sure why banks allow cardholders to go over their credit limit without authorization. But getting charged $25 for going over your credit limit by $1 is usurious! Be smart, know your credit limit on your credit cards and don’t go over them. If you’re constantly bumping up against your line, ask for a line increase (banks can no longer give you an automatic line increase without your express consent in Canada). If they won’t give you one, get another card and spread out your payments.
5. Airline Baggage Fees:
Air Canada has already jumped into the fray charging $25 per direction for your first checked bag when flying to the U.S. Westjet is not far behind, announcing in early February that “it’s a place where we expect to be able to generate some incremental revenue,” as explained by president and CEO Gregg Saretsky. For now West Jet still does not charge for the first bag, so their a good bet over Air Canada. Also some of the Aeroplan loyalty statuses (Prestige and up) offer first checked bag free.
6. Gift Card Fees:
Gift card fees have definitely gotten better over the years. But if you plan on getting someone a $40 Visa gift card, say from RBC, just remember that your paying a $3.95 account opening fee, which is 10% of the value of the gift going to RBC (and they don’t even say thank you). Some, such as Van City, charge $2 upfront, and then a $2.50 monthly service charge! You’re better off giving cash, or a gift card directly from a merchant. For example if you buy a Home Depot gift card they don’t charge any up-front fees or monthly surcharges and the card never expires.
7. Travel Booking Fees:
West Jet doesn’t charge’ em. Air Canada just dropped them. But guess who charges you $30 per ticket if you decide to make your travel reservations over the phone versus online? Aeroplan and Air Miles. So next time you redeem your Aeroplan points for your family vacation for 4 to Disney, do it online, or you’ll be out an additional $120 (another reason Aeroplan is digging it’s own grave, but that’s a separate topic for discussion).
8. NSF (Not Sufficient Funds) Fees:
Don’t write a check that can’t be cashed. While most of the time it’s unintentional, it will cost you $45 for EACH occurrence, and they tend to come in batches. If you’re really disorganized and this happens to your frequently (more than twice a year), get overdraft protection. NSF checks can also have the distinction of staying on your credit history for 6 years!
9. Overdraft Fees:
It’s getting more difficult to keep track of money in and money out nowadays with so many automatic monthly, quarterly and annual withdrawals, payments, checks, that all come in at different times of the month. Canadian banks have taken notice and have increased the cost of overdraft fees. Some are charging as much as $4 per month for protection (RBC, TD, CIBC). But there are others, such as ING, that won’t charge any flat fee if you go into overdraft for 30 days. But where you can really get hurt is paying upwards of 20% interest (annualized) on your overdrawn amount, which all the banks charge.
10. Late Fees:
Late fees are the bane of our existence. You know your parking ticket won’t go away, so just pay the $30 bucks and don’t be late, it will cost you another $15-$25, no to mention a suspended license. Be punctual with your credit card bill payments – late more than twice in a year and your interest rate can be bumped up 5%. Don’t forget to pay the principle on that 12 month no interest loan you got from Home Depot, or you’ll quickly be paying 28.8%, going from hero to zero. Just remember, procrastination and wishing it away, always have a cost.
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