Avoiding Hidden Charges
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From The Perspective of a Finance Advisor
A friend of mine who is a financial planner just gave me some interesting information on hidden costs. He also added that his revenue comes from fees he charges to clients that usually appear as a percentage of their assets. These charges are deducted automatically at the end of each quarter or year.
Though customers agree to this condition during an investment, they get unlimited guidance and assistance under one roof.
An Unusual Response To Transparent Fees
My friend then changed to an annual fixed fee arrangement plus minor fees for each subsequent consultation; this move cut average client cost by almost 40%. Clients however hated paying for every single visit though their overall annual expenses reduced. They preferred the former approach- larger but less visible costs – compared to what is now in place. Consequently, he resorted to the percentage based plan so as not upset his clientele.
Are You Like His Clients?
This may sound like a funny story, but it illustrates something common: people are less sensitive towards concealed prices rather than explicit ones even when those save them money. Hidden expenses are everywhere, and we often overlook them in our everyday lives. Let us take a look at some common hidden fees and how you can avoid them:
Foreign Exchange Fees
At times foreign retailers charge hidden foreign exchange fees by converting local currency into USD at unfavorable rates. Therefore, encourage businesses to bill in their own currencies with good conversion rates through VISA/MasterCard network.
Escrow Closing Costs
Even electronic transactions sometimes result in unexpected postage bills during escrow periods. Prioritize negotiating upfront escrow cost given most costs being negotiable before starting escrow process. For real estate purchase offers do your homework and choose an inexpensive escrow provider which will save thousands of dollars.
Out-of-Network ATM Fees
To evade out-of-network ATM charges plan ahead and withdraw cash from your bank’s ATMs instead. In case these expenses are reoccurring, consider moving to a bank like Charles Schwab which covers all ATM fees.
Other Bank Fees
Bank charges including overdrafts, account maintenance and wire transfer fees can quickly add up. For fewer surprises, review your bank statement regularly. Look for other banking products with low costs or request that the bank waives or reimburses any extra charges.
Movie Ticket Convenience Fees
To avoid movie ticket convenience fees buy several tickets at once or purchase them directly from the cinema’s website which in some cases has lower prices. On the other hand when show times are not popular it is better to just go to the theatre and purchase the tickets there totally avoiding the cost.
Hidden Investment Fees
Investment costs may be hard to understand. To keep expenses down buy cheap index funds and apply a buy-and-hold method of investing. Whether investment service rates are justified by their resulting benefits and watch out for exorbitant fees on employers’ 401(k) schemes.
Airline Baggage Fees
Some airline tickets are advertised as low-priced although they have hidden baggage charges. Thus compare available airlines’ fares, and you may want to purchase an expensive ticket with luggage so that you can save money overall. Accordingly always check luggage policies before booking tickets.
Hotel Charges
Resort fees which are often contained in hotel bills include things such as Wi-Fi and bottled water. Know about these fees before hand and be is ready. Buying water from a nearby pharmacy instead of paying motel prices.
Credit Card Convenience Fees
Sometimes credit card convenience charges, although not completely hidden, hit customers by surprise. Giving up the fee may be worth it if you can receive rewards like cash back or payment deferral. Figure out whether that adds up to you.
The Bottom Line
Avoiding unexpected spending requires knowledge and planning ahead. While stores constantly innovate ways to impose charges, being proactive can help you prevent undesired costs. There is a saying: “Fool me once, shame on you; fool me twice, shame on me.”
Associate Editor • Technology News and Cybersecurity Specialist
Olivia provides detailed latest tech news, reviews of latest gadget trends, and compelling cybersecurity tips and tricks on the internet in todays world.
