No one likes to pay more than the advertised price for something. When financial products charge additional fees, especially when there is nothing that can be done about them, it is infuriating. One example is the credit card interchange fee. Every time a purchase is made , from soda pop to the latest technological wonder, credit card companies charge 2 percent of the purchase’s price. Retailers make up for this lost income by increasing prices. These increases penalize the consumer, whether or not they use credit cards for their purchases.
Credit Card Fees Are Just The Start
In addition to credit card interchange fees, another fee credit card companies charge are known as foreign transaction fees. Credit card companies charge these whenever customers use their credit cards abroad. According to the credit card companies, these fees are designed to combat fraud, however, these fees also generate additional profit.
Fee Strategies Other Companies Use
Aside from financial companies, other industries are reaping the benefits of additional fees. The online ticket site Ticketmaster not only charges customers the retail price for tickets, they add facility fees, convenience fees and order-processing fees. Ticketmaster even charges for printing the tickets you buy.
Auto insurance companies have learned that charging extra for uninsured drivers can increase their profitability. With 25 percent or more of motorists lacking insurance coverage, charging these extra fees seems to make sense. After all, the likelihood is high that an uninsured motorist will be in an accident. However, this means that law-abiding drivers have to pay extra to cover those who do not follow the law.
Airlines also love additional fees. Many airlines began charging baggage fees a few years ago. After an initial backlash, this practice is now the industry norm. Fees for baggage typically begin at $25 per bag, increasing to $50 if there is more than one. If the luggage is over 50 lbs., another fee is charged. While airlines insist that these fees help offset the expense of jet fuel, the traveling public is not so sure.
Additional Fees That Infuriate
Currency conversion fees also cause travelers some major headaches. Foreign exchange offices or the local foreign banks charge every time currency is converted. Credit card companies, not wanted to be left behind, charge as much as 3% for purchases made outside of the United States. If you are not careful, you may not notice these fees until you receive the month credit card statement.
The expense of seeing a doctor or being admitted to a hospital is high enough. These costs keep rising, though, in part because of the huge amounts of malpractice insurance that doctors are forced to take out to stay in business. Doctors, even good ones, live in constant fear of being sued by their patients. Medical providers pass their malpractice insurance fees on and charge you higher costs to make up for the insurance that they have to take out.
Finally, minimum balance fees can also drive you crazy. Many bank savings accounts or investment accounts require consumers to have a minimum balance. Consumers with balances that fall below the minimum will be charged this fee. For people who are already struggling financially and can barely keep a minimum balance in their account, all those fees only make life tougher.