Thursday, February 25, 2010

Top 5 Things Americans Overpay For

This week is America Saves Week, dedicated to encouraging more and more people to save and keep adding to their rainy day fund.
BillShrink, the free money-saving site, has put together a list of “5 Things Americans Overpay For”. Check it out and see how you could cut back.
 Top 5 Things Americans Overpay For
  1. Non Bank ATM Fees - ATM Fees can add up. They can also be slightly misleading; it’s not unusual for ATM convenience fees to cost $2.00, and for the card-issuing bank to charge up to an additional $2.50 as a non-bank ATM Fee. As a result, it may cost up $4.50 to withdraw $20.00. 
  1. Credit Card Late Fees/Overdraft Fees - Paying late fees on credit cards and bills, and overdraft fees on bank accounts can be a disheartening use of one’s hard-earned money. Especially when a minimum payment on a credit card of $15 is missed, resulting in a late fee that can be as high as $39 (and perhaps result in an APR% increase). Overdraft fees add up, especially when they are made in quick succession, resulting in fees for each transaction made while an account is overdrawn. Luckily starting this week there are new consumer protections thanks to the Credit CARD Act of 2009, but interest rate hikes last year, mainly due to late fee penalties, cost Americans more than $10 billion.
  1. Car Maintenance from the Dealership - Unless a car is under warranty, going to a dealership for a repair is one sure way to overspend. Car dealerships often promise that certain work can only be done by authorized dealerships, and are less-inclined to negotiate prices, something that should be done with any type of auto maintenance.
  1. Pseudo Health Products – Like the “protein bars” that are presented as “low fat” or “all natural” even though can end up just as unhealthy as candy bars (the sugar!), while costing up to five times as much.
  1. Cell Phone Plans – 80% of Americans overpay on their wireless plans, as much as $300 for a standard 2-year contract.  The biggest reason - they don’t know how many voice minutes, texts and data they actually use.  If more people “right-sized” their plans to meet their actual needs, or if more friends/colleagues/neighbors/family members signed up for family plans, they could save hundreds of dollars a year.

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