Want To Save Money In a Tough Economy? Go On a Fee Hunt

With a worsening economy, many Americans are taking extra care to keep their cash and plastic in their wallets. However, the number and amount of fees for all sorts of everyday expenses and items are like an invisible vacuum for nickels, dimes and dollars that could otherwise be put to better use. The solution is to be aware of where these fees are used, effective planning, scrutinizing of bills and most important, comparison-shopping.

Here’s a list of fees large and small that you should watch for and stamp out or minimize over the coming months:

Bank fees

Let’s start with the obvious. Fees at banks and other savings institutions have recently been reported at all-time highs. Bankrate.com reported last fall that ATM surcharges, bounced check fees and monthly service fees all increased from September 2007 to September 2008. ATM surcharges are at a national average of $1.97, up nearly 11 percent, bounced check fees rose an average 2.5 percent to $28.95 and monthly account service fees hit $11.97, up a nickel from 2007. Bankrate also reported that the minimum account balance that customers need to maintain to avoid those fees rose to an average of $3,461.84, up 4 percent. Also, some banks charge fees for the usage of debit cards, which consumers use to avoid paying credit card fees.

Before vacations and trips to places where your bank doesn’t have ATMs, make sure you withdraw the cash you’ll need ahead of time, and only for expenses you have planned. Watch your balances like a hawk so you don’t risk overdrafts—and remember that signing up for overdraft protection will cost you another fee—and start comparison-shopping at banks and credit unions for the lowest account minimums to avoid fees. As for debit cards, talk to your bank about any fees they may charge on their debit cards that carry a major credit card logo, particularly if there are awards attached to its use.

Credit card fees

These can eat you alive. Late fees, processing fees, and surcharges on cash advances are just some of the fees that banks and credit card companies use to increase their revenue. Just as you become more diligent in examining your banking options, apply the same standards to your credit cards.

Retirement plan fees

If you work for a company, it makes sense to ask your human resources department how much they’re paying in fees to your 401(k) plan manager or managers. They might not actually know, and that’s a good indication that they’re not shopping well enough for your plan. It’s also important for you to investigate the fees on the retirement money you invest by yourself in IRAs and other brokerage accounts and plans.

In the past months, Congress has held hearings on 401(k) fees and how it’s tough for individuals to tell what they’re being charged. As investments struggle back, it’s appropriate for investors to become better informed about what they’re paying to have their money invested.

Portfolio management fees

Also known as assets under management (AUM) fees, these are various fees that might be assessed against professionally managed portfolios. It is always important to understand these fees, see how they compare with competing types of portfolios and investments, and keep an eye on what triggers them.

Travel fees

It will be interesting to see what the travel industry does about the heaps of fees it charges with the slowing economy, but you shouldn’t assume you’ll get a break if you actually do get to travel this summer. So be vigilant. Check on airline cancellation and change fees. Some airlines still offer liberal and flexible cancellation policies. Others may be more restrictive, yet that may be offset by other considerations.

Pack light so you won’t have to pay a second bag fee or an overweight fee for a single bag. Query prospective hotels on all the charges they can potentially tack on to your bill for things you don’t plan to use like gym or certain entertainment fees. If you’ve never done that, it’s time to start. Also, check on parking and in-room Internet access fees. Weigh the cost of travel insurance against potentially pricey cancellation fees and hotel room charges that you’ll automatically have to pay if your trip is delayed by weather or an emergency. And make sure you query your rental car company on fees that apply to the places you’re going and whether it may be cheaper to rent in town than from the airport.

Store fees

Avoid retailers who charge restocking fees, particularly for electronics. Also sign up for loyalty programs that not only give you bonus points to use on future purchases but provide you special money-off coupons online, in the mail, or at the register.

Source: Financial Planning Association