3 Sneaky Fees and Expenses You Can Avoid

 

While we’re racing around in our busy lives, we can sometimes face unwelcome fees and expenses. By not paying attention to these fees, many of us are essentially throwing away money that could otherwise be spent on food or other essentials. Learn about three of the most common types of sneaky fees and get advice on how to avoid them.

Stop Paying Interest Charges on Your Credit Card

Many of us carry around one or more credit cards to pay for purchases. But if you carry a balance on any of your credit cards, you’ll be charged a fee by your credit card provider, and the higher the interest rate, the longer it will take you to pay off the balance.

The best way to avoid having to pay any interest is to pay your full balance before the end of your grace period (most, although not all, credit card providers offer a grace period of 21 to 27 days). If you’re not able to pay the balance in full, make it a priority to pay off the balance as soon as you can.

Watch for Transaction Fees When Traveling Abroad

You’ve finally made it to the holidays, and you and your family are looking forward to jetting off abroad. Before you jump on the plane, make sure you check how you’re going to pay for items when you reach your destination. Many card providers charge a fee of up to 3% on foreign transactions.

You can avoid these transaction fees in several ways. First, you can apply for a credit card that doesn’t charge a fee. You should also check with your bank, as sometimes debit card transactions will incur a fee. If this situation is the case for you, you might consider opening a new account altogether. Finally, you can exchange your money before you reach your destination; however, always make sure you get a good exchange rate.

Don’t Pick Up 401(k) Penalties

You may be thinking of withdrawing money from your 401(k) account early to cover some basic costs. Maybe your car needs repair, or you want to get the kitchen renovated. Generally, making early withdrawals from your 401(k) account is not a good idea. If you withdraw any money before the age of 59 1/2, you will incur a penalty fee of 10% of your income.

However, you’ll find some exceptions to this rule. Circumstances in which you won’t be charged include covering the cost of large medical bills, finding yourself unable to work due to permanent disability, or getting divorced and having to split your retirement fund. Before you make any decisions on withdrawing money from your 401(k) account, it’s always best to seek advice from a financial advisor or wealth management professional.

Even if you are extra vigilant about avoiding fees, you may still find yourself with some financial challenges, such as mounting debts related to credit cards or unpaid taxes. If this arrangement is the case, you may still be eligible for tax penalty relief or other initiatives to help you work through your financial situation. Additionally, consulting a tax professional when you’re struggling with tax issues can give you access to information and resources to help you avoid sneaky fees and hidden expenses.