Banking and Credit Card Fees that You Should Not Be Paying…

Andover, Massachusetts October 26th, 2010 – Almost everything nowadays has some sort of fee associated with it. Websites that charge for content, schools that charge for students to play sports, and even extra fees for texting on cell phones are just the tip of the ice berg. When it comes to your finances, banks and credit card companies continue to come up with new and innovative ways of charging you, the consumer, an arm and a leg. While many expected financial fees to increase after the landmark 2010 Credit Card Act, this has not occurred. While some fees are becoming more common, the following 5 fees should be avoided at all costs and can be done so quite easily and without much effort.



1. Checking Account Maintenance Fees. This fee used to be almost unheard of before the financial crisis when free checking accounts were the norm. While this has changed somewhat in the last two years as banks have tried to increase revenues from their current customers, it should still be something you do not have to pay if you are in good standing with your bank. If they require a minimum in your account, just shuffle some of your funds from your savings to your checking’s account. The interest rate advantages that used to make savings accounts more appealing have all but disappeared as interest rates are at record lows. If you don’t have the funds to shuffle around, shop around, there should still be local banks or credit unions in your area that would love to have you has a client and will offer you a free checking account.



2. Annual Credit Card Fees. While these fees have been around for decades, the savvy consumer has always been able to avoid these fees if they wanted to. Typically annual fees are reserved for consumers who are looking for high end services such as the concierge service offered by some American Express cards or for consumers who have a bad credit history and need to pay to be able to rebuild their credit history with a new card. Either way, if you don’t want to pay for a card, you should be able to find one that doesn’t charge an annual fee. If your current card recently had a fee added onto it, don’t be afraid to call the credit card company and ask them to remove it. If you can make the case that you have been a loyal client of theirs they will most likely waive the fee.



3. Credit Card Payment Insurance. Another product designed by creditors to get as much money out of you as possible while paying out as little as possible. This product offers you the peace of mind that in case you lose your job or for some other reason can’t pay your credit card bills each month that this insurance will cover your monthly payments until you are back on your feet. Sounds great right? Well, the reality isn’t quite that rosy. Typically, these insurance plans have many conditions that need to be met and even then the payouts are not what you think. Almost none of them pay your monthly bill in full, many only pay the minimum amount or a certain percentage of the bill. On top of that, almost all of these plans run out after a certain short period of time. While most people don’t expect to be unemployed or without income for a long time period, the recent recession and ongoing unemployment crisis shows that this isn’t always the case.



4. Lost Wallet Protection. This has to be one of the most ridiculous services being offered by creditors. This "insurance" offers to make the phone calls to your other creditors in case you lose your wallet. Not only is this service a waste of money, but typically you don’t lose dozens of cards. So, can you really not make a couple of phone calls in the off chance you lose your wallet? Save the money each month and treat yourself to a nice dinner or pay down some more debt instead.



5. Credit Report Monitoring. I have written about this extensively in the past and how much of a scam these services are. Most of you have heard the catchy jingles that offer free credit reports on TV. What many of you don’t know is that to get that "free" report, you need to sign up for a credit report monitoring service. Basically this service keeps an eye on your credit report every month and will notify you if something unusual pops up on it. What makes this service unnecessary is the fact that most credit card issuers already do this. This is why your card could be frozen if you travel overseas without advising them of your trip. They already lookout for credit card fraud and you really should not need this quite expensive service. Stay Away!



Readers, have you used these services in the past? Do you disagree with me and actually found some value out of these? Let me know, I could be convinced that some of these services are a good value for consumers!



Preferred Financial Services is a debt reduction firm certified by the CFC (Center for Financial Certifications) and accredited by U.S.O.B.A. (United States Organizations for Bankruptcy Alternatives). Headquartered in Andover, Massachusetts, Preferred Financial Services has been a leader in the debt reduction industry since 2003. Preferred Financial Services has acquired some of the best experience in the industry over the past 7 years. In 2009 alone Preferred Financial Services reduced over $16.5 million worth of consumer debt for just $6.4 million, for a savings of about 60%- and over 2,900 accounts were settled on behalf of their clients.



For more information, please visit www.pfsdebtrelief.com or follow us on our blog at www.pfsdebtrelief.com/blog/ .



Contact:

Stephan Tavernini

Marketing Coordinator

Certified Educator in Personal Finance

Certified IAPDA Debt Arbitrator

stavernini@pfs1.net