financial reflections

I just canceled another one of my credit cards this week.  It had a zero balance, but I just kept it around.  That was partly out of laziness and partly out of a warped sense of security.  The good news is that I’m running out of cards.  What scares me is that I have a very small emergency fund, and have an feeling that I should hang onto a few cards “just in case.”  What changed my mind was the annual fee the card charged, and it got me thinking about all the other “fees” consumers face.  (warning, rant follows)

If I look at my telecom bills (phone, cellular, internet) I can see all kinds of small fees that add up to me paying more each month.  But it doesn’t stop there.  It seems that no matter where I turn, I’m seeing fees padded onto everything.  Car dealers try to add on fees for extras I don’t want.  Airline tickets have “junk fees” above the stated price, and Hotels have fees and the infamous mini bars that have $5.00 bottles of water.  Not to mention that the government is in on the action (unless you live somewhere with no sales tax). 

Unfortunately, there are reasons why hidden fees work.   We end up paying them and the economy rolls along in spite of obsessive hot-heads like me.  But there is (or at least was) a hidden fee I could bypass - the tip.

Don’t get me wrong.  I’m a generous tipper.  I will even put money in the jar they put by the cash register at the burrito place.  But I do like the option of not paying, though I use it rarely.  Sometimes the service is just terrible–why should I pay?  It’s bad enough when I have to pay for bad food.  I’ll gladly pay extra when the service is good.

But now I notice that more and more, the tip is added as a “service fee” on the bill already.  It’s become another hidden fee.  Then there’s the tip stalkers, you know, folks like those zealous hotel workers who provide services you don’t need just to get a tip?  I can handle my own bag, than you very much.

I guess my own rules for avoiding the fees and saving some money are like this:

• Ask - It’s often that simple.  I’ll ask what other fees exist, and it’s often told to me.  If I get a vague or evasive answer, I know it’s time to move on.  Outside of that, read the fine print.  It sounds like common sense, but hidden fees work because people often do a little research, or vote with their feet when given a line.
• Compare apples to apples - hidden fees are often used to confuse the true cost of a service.  Adding up the fees between two competitors gives a better picture of who’s really got the best deal.
• If a fee (aside from a tip) is optional, I often don’t pay it - In other words, I won’t get an add-on or optional service unless the it’s really needed.  Of course, knowing what the fees are, helps out.

Then again, this all could be avoided if we just lived in a world where businesses could just provide honest, up-front pricing with clearly defined options.  Maybe that day will come, but for now, I’ll keep doing my homework before buying.