What Are “Junk Fees,” and How Do You Spot Them?

National nonprofit credit counseling agency helps consumers identify trigger words for hidden fees on a wide range of daily bills and entertainment expenses

Junk fees — misleading or hidden charges — can creep up on bills after you make a purchase or when you are about to check out. They aren’t prominently advertised or communicated upfront — consumers think they’re paying one price, but end up footing a larger bill.

“Junk fees can add up quickly, and this is a major concern for the millions of Americans who live paycheck to paycheck,” said Amy Robbins, associate director of operations with Take Charge America, a nonprofit credit counseling and debt management agency. “Not only can junk fees lead to higher debt levels, but they prevent consumers from reaching emergency savings goals.”

While federal agencies have been urged to crack down on these fees, some companies make optional items look mandatory. Robbins notes these types of fees commonly appear on bills for hotels, resorts, travel, concerts, festivals, parking, online subscriptions and home services.

Robbins shares five ways to identify and prevent junk fees:

• Watch for trigger words: It might seem tedious, but diving into the fine print is essential for understanding what you’re really paying for. Look for “service,” “convenience” and “processing” fees, which add to the total cost of a product or service. You may also see “facility use” or “destination fee” when weighing travel expenses. Assess whether the total cost fits into your budget with all fees included, and not just the base cost.
• Determine if you’re double tipping: With on-demand services especially, investigate whether a tip is included on your bill before paying a second “optional” tip. You might be paying 40% or more towards a tip without knowing it.
• Conduct a fee audit of your regular bills and purchases: Request itemized receipts of your subscriptions and monthly bills so you can review all fees. This will help you understand the true impact on your budget and assess whether the level of the service is necessary. It may make sense to downgrade or reduce services.
• Track communications: Save the names, email threads and contact information of the people you speak with; this helps prevent stress down the line should you need to dispute fees.
• Comparison shop prior to purchasing: Make sure you’re getting the best deal before hitting the checkout. Services like Google Shopping, PriceRunner and Shopzilla can make it more efficient to compare prices online.

For additional financial resources, visit Take Charge America’s Budget Tools.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts. To learn more, visit takechargeamerica.org or call (888) 822-9193.

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