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13 fees that are a total waste of your hard-earned money

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Alex Thomas Sadler, Clark.com

It seems like pretty much everything comes with fees these days — some we know about and some we don’t.

This is why frequently checking in on your bank, credit card and other accounts is crucial — not only does it help you spot potential fraud sooner rather than later, but it can also help you identify any unnecessary or hidden fees that you may not even realize you’re paying.

Bottom line: if you don’t pay attention to where your money is going, you’re very likely wasting a lot more than you think. And frankly, paying unnecessary fees is just frivolous — a bad habit you need to kick if you want to develop a successful and long-term sustainable money routine.

So here’s the deal — unfortunately, there are some fees we all just have to live with. But there are plenty of others out there that you can avoid. You just have to know what they are, how to opt out and where to find the free alternative.

Read more: 40 things you can do today to take control of your money

13 fees you should never pay

1. Credit report fees

Due to the passage of the 2003 Fair and Accurate Credit Transaction Act (FACTA), all Americans are entitled to one free credit reportfrom each of the three major credit reporting agencies— Equifax, Experian and TransUnion — upon request every 12 months. There are several ways you can request yours, including online, by phone or by mail.

  • Online: Go to annualcreditreport.com. This is the ONLY site that’s truly free. You’ll need to provide your name, address, birth date and Social Security number.
  • Phone: (877)-322-8228
  • Mail: Complete the Annual Credit Report Request form and mail it to the following address:
    Annual Credit Report Request Service
    P.O. Box 105281
    Atlanta, GA 30348-5281

Here’s a guide on understanding your credit reports. 

2. ATM fees

ATM fees are seriously one of the biggest wastes of money — regardless of how convenient it may be. In fact, the average ATM fee is now up to $4.52!

The good news is you can avoid it. The first way is by using your bank’s ATM, but of course, there isn’t always one around.

A couple of examples are USAA and Charles Schwab. Plus, many of the credit unions that have large co-op networks offer free ATMs. Online banks and credit unions also refund some ATM charges per month

Many supermarkets will give you up to $200 at the register, fee-free. (This is a great way for stores to reduce cash on hand.) Sam’s Club allows you to get up to $100 cash back when you check out.

3. Late payment fees

You’re typically charged a late fee any time you pay a bill after the due date. On top of that, making a late payment on a credit card, mortgage or other loan can also damage your credit score, as well as the health of your overall credit.

And it doesn’t matter if you’re three days late or 30 days late — one late payment could end up causing you financial damage for years. Plus, it shows the lender that you’re unreliable.

According to Credit Karma, here are a few potential consequences of paying a bill after the statement due date:

  • You’ll usually be charged a late fee.
  • Your interest rates may rise.
  • It may end up on your credit report.
  • It might decrease your credit score.

Ideally, you really want to be paying more than the minimum monthly payments on credit card debt. Since credit cards typically carry very high interest rates, the longer it takes you to pay it off, the more money it’ll cost you over time.

Look for a few expenses in your budget that you can cut or reduce, and then put that money toward your credit card debt every month.

If you can only swing the minimum payments right now, do absolutely everything you can to make those payments on time! If it means cutting something big out of the budget, then make it happen! Until you get your debt under control and paid off, you’ll never be able to get ahead financially.

4. Money transfer fees

There are tons of ways to transfer money, both domestically and overseas, for free. Here are some of your options:

  • Walmart is getting into the cash wire business with a new service called Walmart 2 Walmart. While the typical wire cost could be $50 to $75 from Western Union, this new program allows you to go into any Walmart store to the Money Center and send a wire of up to $900 for just $9.50.
  • PayPal is another option. You can send money from your PayPal to another PayPal person by linking up bank accounts. This is significant because it allows you to send money overseas for free.
  • Then there are also apps for smartphones that will let you send funds for free to another person:

So let’s say you’re at dinner and you want to split the bill. One person pays with a credit card or cash, but what do you do as the other party if you don’t have enough cash on hand to give them for your part of the bill?

That’s where something like Venmo or Square Cash comes in handy. You can send money to anyone you want for free, simply using an email address or phone number.

The one question is security on systems like Square Cash. But if you set a $250 maximum daytime cap, you can rest pretty easy.

Here are some more cheap ways to send money internationally.

5. Checking account fees

With more options available today, you can get a checking account that doesn’t require a minimum balance to avoid the fees.

So before you choose a new bank, make sure to do a little research on any and all fees associated with the account. NerdWallet has a great list that compares checking accounts from various institutions, including online-only banks.

Read more: How to choose and switch to the best bank for you

6. Foreign transaction fees

Before you travel outside the U.S., make sure your credit card doesn’t charge foreign transaction fees, because they can really add up. Most credit card issuers charge 3% if you use their card outside the United States.

So look into cards that don’t charge these added fees. Capital One has no fees at all on their credit cards when used internationally. Ditto with Bluebird. Many smaller issuers and credit unions will also not charge these fees. Use those cards, or other another card that won’t charge you the fees, if you can. In addition, USAA has no foreign transaction fee, though there is a 1% MasterCard/Visa fee associated with their cards.

Using ATMs abroad is the most effective way to get money when traveling. But some banks will charge a foreign currency rip-off fee that usually starts at $9 or $10 per transaction! 

If you’re with a big bank, check to see if they’re part of any alliance where you can use ATMs fee free in other countries. Simply tell them what country you’re going to and they can tell you if there’s a fee-free alliance partner bank there. You can also get fee-free ATM transactions abroad with most Capital One cards. 

7. Credit card interest

The average credit card interest rate is around 16%, according to Bankrate. But some cards can carry rates as high as 30%.

If you don’t pay your bill in full every month, interest charges can start to add up very quickly. And the longer that debt just sits there — continuing to add interest to the total principal you already owe— the more difficult it becomes to pay it off.

The goal with credit cards is to only purchase what you can afford to pay off in full every month, because otherwise, you’ll end up wasting a lot of extra money on interest over time.

Here’s a guide on how to increase your monthly cash flow by reducing your expenses.

8. Overdraft fees

Overdraft fees now cost on average $32.44 per occurrence, which means if you have a few transactions go through once you overdraft your account, you could pay multiple fees.

If your bank encourages you to allow overdraft fees, don’t do it. It’s just another way they’re trying to make money from you. In fact, many people allow their bank to charge these fees without even realizing it.

So to avoid the extra costs, tell your bank you want to opt out of overdraft fees, and then when you try to make a purchase and there isn’t enough money in your account to cover it, the bank will just refuse the transaction.

Read more: 5 basic money rules you can live by forever

9. Shipping fees

If you shop a lot on Amazon, the price of an Amazon Prime membership pays for itself in shipping costs of the course of a year — especially if you share the subscription with a friend or family member (splitting the annual fee among the account users).

There are also so many coupons and promo codes available these days for free shipping that you should rarely have to pay for the cost to ship something you buy online.

10. Convenience fees

You’ve probably gone to check out at a store at some point or another — maybe a small shop or even a gas station— and been told that you must buy at least a certain amount in order to use a credit card, otherwise you have to pay a fee.

Don’t pay it. The fee is probably greater than any rewards you’ll get from using the card, so it’s just wasted money. This is why it’s a good idea to always keep some cash on hand, so you don’t get caught in a situation when you’re forced to waste money on a fee you don’t need to pay.

11. Checked baggage fees

When you’re shopping for a flight, make sure to include the added cost of checked baggage fees for airlines that charge them. While the price of one flight may be slightly more expensive than another, if that carrier doesn’t charge for baggage, you may actually save money by purchasing that flight. For example, Southwest allows you to check two bags for free!

Read more: Airlines with the highest baggage fees and how to avoid them

12. Partial payment fees

When a company splits your annual bill into installment payments, so you pay it monthly instead of all at once, sometimes they will charge an added fee. So make sure to check the fine print of your bills, and if you have the money to pay the annual amount in full, it could save you money by avoiding those extra fees!

Read more: 28 easy ways to make extra cash every month

13. Unused subscriptions

Maybe you signed up for an online streaming service or some other subscription that you forgot about — or even know about but never use.

That $3.99 monthly fee may not seem like a big deal, but if there are several of them going through each month — those charges can add up to a lot of wasted money! Money you could be using to pay off debt or to boost your savings.

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