Save The Fees
Posted by Gail | Filed under SensibleSpending
A lot of people pay good money for stuff they can get for free, or for stuff they use without giving a second thought to the cost.
In a world where the average house price is $365,000, which results in a monthly mortgage payment of about $1,900 (assuming 10% down and 25-year amortization at 5%) who would blink twice at dropping $15 for your credit report so you can check to see if you’re mortgage-worthy. But you shouldn’t. You’re allowed to check your credit report to see what information financial institutions are sharing about your credit history for free if you write in. So plan ahead and write in.
Here’s another fee that makes me scratch my head: annual credit card fees. Banks want you to use their credit card so they can make millions on transaction fees, but you should pay for the card too? Really? With free cards a dime a dozen, who thinks it’s a good idea to drop $75-$120 for features you may only occasionally use? Hey, if you’re charging up a storm and paying your balance off in full every month, you may make a premium card pay. Carrying a balance? You’re a dope.
Then there are the fees for credit insurance: credit card balance protection, mortgage life insurance and the like. You do know that those “insurance” policies have not been underwritten yet and can be declined later if something untoward pops up? And you do know that you’re paying way more in premiums than if you went out and got private term life insurance to cover your butt? Nuff said.
Cancellation fees are a big money-producer for cell phone and cable companies. Cancel a contract before the end of its term and you’ll flush hundreds of dollars down the toilet. That’s just bad planning, either when you took the contract or now that you’re thinking about dumping it. Think of a cancellation fee is really a “stupid tax.” Still willing to pay it?
One of my favourite “You’re-a-Jackass” fees is the one people routinely pay because they can’t plan ahead or be bothered to walk down the block: the ATM fee. Folks routinely fork over $4 for a $20 withdrawal. Hey, I’ve seen the bank statements! And as for the non-bank cash machines, which will cost you up to $6 in fees, that should leave you braying.