Everything comes with a price. If you aren’t aware, financial companies and banks might be charging you several hidden fees or finance charges. Be careful about these finance charges that you might be paying.
Everyone needs to be vigilant and regularly watch their bank accounts for unfamiliar items. I use PersonalCapital to see all my accounts in one place. Here’s how you can avoid extra and hidden financial charges
Maintenance Charges on Credit Cards
Most credit card companies or banks charge you maintenance charges on the credit card. Although most banks offer free credit cards, you might not know about the maintenance charges you have to pay for one.
A free credit or debit card usually means you don’t have to pay the initial joining fee. But after the first year, the maintenance fee starts kicking in.
You might not be able to avoid the maintenance fees, but it’s helpful to be aware of the amount you have to pay.
Hidden Charges on Personal Loan
Paying fees on personal loans isn’t a new thing; you might be paying hidden or open fees while taking out personal loans.
While taking personal loans, you might be charged with processing fees, cancellation charges, prepayment penalties, late payment charges, and dozens of other charges.
The most common cost is the processing fees that are charged upfront.
Many of the other charges can be avoided if you’re 1) aware of them 2) stay cautious about the terms and conditions of the loans and 3) pay back the installments on time.
Foreign Transaction Fees
You might be having a great time abroad enjoying your well-deserved vacation.
But you might start having reasons to worry when foreign transaction fees start kicking in.
Having a globally accepted card doesn’t guarantee free transactions abroad. It generally means your card is accepted worldwide, but you still have to pay fees for every transaction.
The foreign transaction fees are a certain percentage of the amount transacted – usually 1 -3%.
You can avoid paying the foreign transaction fees by either using cash or a credit card that doesn’t charge you for foreign transactions.
Balance Transfer Fees
Transferring a large sum from your credit card to a new credit card at a zero-percent interest rate might sound simple, but that’s not all it entails.
Such transfers could leave you with a hefty surcharge of 4% in transfer fees.
Always be cautious of every finance charge that you’re about to pay. For some people. 4% in transfer fees isn’t a bad idea.
However, you should weigh out the pros and cons and see how it benefits you.
Hidden Fees from Paypal
If you’ve ever used Paypal to shop online, you might have discovered a monthly fee automatically charged to your account.
Generally, you might be paying such fees if you’ve signed up for some sort of subscription or online membership.
Businesses use this payment system to benefit off customers that forget to cancel their subscription.
Such individuals end up paying a recurring fee for a service that they don’t even realize they’re buying.
These fees are charged to your account forever until you decide to cancel the subscriptions.
To avoid such charges, be sure to check your payment history regularly.
You might be charged with recurring weekly or monthly fees; so be careful of that.
Buying a Home Costs More Than You think
Homebuyers are at risk of paying a lot of fees at closing, including inspection fees, title searching fees, loan fees, survey fees, and other ridiculous fees.
You can pay some of these fees without even knowing. Although these fees mostly can’t be avoided, you can pay a lot less by negotiating.
You can only negotiate when you’re aware of all the fees you’re to pay.
If not, the fees can add a lot of cost to your home. Buying a house is a great feeling, but spending less on fees adds up the satisfaction.
Prepaid Card Fees
Prepaid cards are a very convenient transaction option, especially for kids leaving home for the first time. But the convenience certainly comes at a price.
Almost all prepaid cards come with some sort of fee, whether maintenance or monthly payments.
The costs might seem insignificant at first, but they might add up pretty quickly if you use many prepaid cards.
So, before picking a prepaid card, be sure it comes with no fees or absolute minimum fees.
Paying fees to access your cash doesn’t sound ideal, does it? For people using ATMs not associated with their bank, they pay a minimum of 4$ in ATM charges.
To avoid such charges, you have to use your bank’s ATMs.
Many bank apps let you map out their ATMs so that you don’t end up paying extra to access your cash.
Overdraft fees also add up pretty quickly, with more than 30$ per overdraft.
But lucky for you, this fee is entirely avoidable if you set up alerts with your bank to warn you when you’re getting low on funds.
Alternatively, you can set up overdraft protection, which ensures your debit card is denied when you are low on balance.
Many businesses profit from charging hidden fees from customers without them knowing.
Most of the hidden costs are avoidable if you’re aware of the fees beforehand.
Also, when the fees are completely unavoidable, you can negotiate them to reduce the cost. Sometimes, even the most negligible fees add up to a huge sum over time.
So be very cautious about the amount you’re paying. After all, it’s your hard-earned money and you don’t want to be paying unnecessary charges.