Stop Getting Nickel-and-Dimed by Nuisance Fees

By Dawn Handschuh, Personal Finance Writer   

If nothing else, the recession has prodded us all to find ways to cut our expenses. You'll get the biggest bang for the buck by looking for big cost savings, say, by raising your car insurance deductible or nursing your old clunker along for one more year.

But don't overlook the small stuff, either. Those insidious small fees many of us get zinged with as we manage our day-to-day finances add up over time but offer little or no benefit in return.

Heaping insult upon injury is the fact that many of the institutions — banks and other lenders — that are guilty of the most egregious small fees are the same companies that happily accepted taxpayer bailouts.

One 2006 study showed that the average American spends $942 annually on hidden fees and surcharges.

So how do you avoid handing over any more of your hard-earned dollars than you have to? You can avoid most of these fees by diligently reviewing your bills, taking the time to familiarize yourself with the terms when you open a new account, and, in some cases, changing ingrained payment habits.

Here are some examples of how the money drip can turn into a steady leak without your even realizing it.

Credit card fees

Customers of MasterCard, Visa and other credit card lenders shelled out $14.6 billion in 2008 in late-payment fees, over-credit-limit fees and other penalties, according to a Baltimore Sun story on the topic. While credit card reform is still ongoing, there are bound to be continued loopholes that allow lenders to take your money for the slightest infractions, so it's up to you to remain on guard and know what's in your credit card contract.

Bank fees

Bank fees are too numerous to list here in their entirety, but you’re likely familiar with many of them, including fees if your balance falls below a minimum threshold, overdraft fees, bounced-check fees and ATM fees.

Cable TV and cell phone fees

If you cancel your cable TV service and later want to reinstate it, the cable company will often charge you a reactivation fee. If you want to terminate a cell phone contract early, you could be charged a $200 cancellation fee.

Hotel fees

Steer clear of the mini-bar in your hotel room to avoid restocking and/or "a la carte" fees for whatever you consume. Bring your cell phone so you can avoid getting hit with a charge to use the phone — even for a local call — in your room.

Fuel surcharge fees

A wide variety of home contractors, pizza delivery businesses and others took advantage of the recent spike in gas prices to add a "fuel surcharge" to bills, and often customers weren't informed of the new fee in advance. Not every business eliminated such fees when gas prices dropped again, which could be a flat $10 charge even if the distance traveled by the vendor was just a few miles.

Airline travel fees

Bag-check fees are a good example of an excessive airline industry fee for something that cost nothing before. The proposal by one airline to install coin-operated toilets is another. But in addition to packing light, make sure you eat a filling meal before departing for your flight, and bring your own beverage, as most airlines no longer offer refreshment on board; if they do offer drinks, you'll probably have to pay a premium, especially for liquor.

Oh, and when you're returning your rental car, make sure to fill up the gas tank, or you'll wind up paying top dollar to have the car rental company do so.

Fees based on your method of payment

Many insurers, such as car and home insurers, allow you to pay large bills in installments, but you'll likely pay $4 or $5 extra for the privilege.

Other companies charge an additional fee if you still prefer getting billed the old-fashioned way (by getting a mailed invoice) rather than through email or online.

Gift cards

Gift cards commonly have hidden charges for activation, ATM withdrawals, monthly "inactivity" fees and for the purchase itself.

Hidden or undisclosed fees drive up the cost of a wide array of consumer products and services, fueling consumer resentment as well as class-action lawsuits.

Many consumers tend to let some of these fees slide in their busy lives. That's understandable, but it's still within our ability to change our money management habits and become more attuned to costs from the start. By doing so, we can plug up one source of lost money that's both wasteful and unnecessary, because the extra money we dole out in fees doesn't always confer comparable benefits.