If you’re like us – or any sensible person – you hate feeling cheated and having to pay more than you originally bargained for. We like to call it “small print anxiety” – a fear of the hidden fees and charges not disclosed transparently by creditors.

Thankfully, there are questions to ask and things to look out for that can help you avoid small hidden fees that can really add up. Here is a list of some of the most common “small print anxiety” fees – and tips on how to avoid them:

• “Free” Checking Accounts. Some so-called “free” checking accounts often require a minimum number of debit card transactions per month, or a minimum monthly account balance – and if these items aren’t met, you’re charged a fee. Make sure your banker explains all requirements in detail, and if you aren’t likely to easily meet the requirements, consider making the switch to a different type of account if your penalties are likely to outweigh the cost of a “non-free” account.
• Late Fees. It’s hard to get out of paying late fees, but if it’s a one-time, first-time or extenuating circumstance, most entities will work with you. Call the customer service representative and politely ask that the fees be removed for an unfortunate oversight on your part. If they refuse, consider switching to a competing company – in most cases, they’d much rather have your continued business than your late fee.  Be especially careful with late fees, as a late payment on one account lawfully enables other creditors to raise your interest rate.
• Interest Hikes. Variable rate credit cards and loans have gotten thousands of consumers into hot water in recent months, with some credit card interest rates shooting upwards of 25 percent. Contact your creditor or the Better Business Bureau if you feel your rate hikes are unfair or unethical.

However, thanks to the Credit CARD Act of 2009, there are limits on interest rate increases. Now, interest rate hikes on existing balances are allowed only under limited conditions, such as when a promotional rate ends, there is a variable rate or if the cardholder makes a late payment. Interest rates on new transactions can increase only after the first year, and significant changes in terms on accounts cannot occur without 45 days’ advance notice of the change.

Of course, the best way to avoid hidden fees is to uncover them before signing on the dotted line. Be sure to read every word of every page in every contract – including loan agreements, credit card applications and monthly bills – even if it takes a while. Don’t be afraid to ask for clarification before you sign.

Another option is to contact your creditors to request that they reduce or eliminate some fees, adding a little more cash and a little less stress to your daily life.  The better your payment history, the more likely they are to make concessions.

This entry was posted on Tuesday, June 22nd, 2010 at 5:18 pm and is filed under Tools and tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.