Despite rising consumer awareness, service providers use a variety of ways to extract money from us. They do not take it by force, but coin a ‘fee’ which we end up paying for months, quarters, years and decades. Add up such fees and you will actually make room in your household budget to do something you really want. Let us look at some of these fees and charges, and find out why they are eating into your precious monthly budget.
1. Banking charges
Termed as service charges, banks impose different kinds of fees that customers end up paying one time or the other. There are charges for non-maintenance of minimum monthly average balance. There are fees for cash transactions (deposits and withdrawals) at base branch i.e all branches/cash acceptor machine in the same city. “Then there are charges for anywhere cash withdrawals by the customer or customers representative to the debit of the customers own savings account at a non-base branch i.e. branch in another city. Similarly, there are fees to be paid for anywhere cash deposits at a non-base branch. Banks also have used their power to slap fees for hitherto uncharged activities like cheque books, and SMS service. Fat fees have to be paid for outstation cheque collection through bank’s own branches and other banks’ branches,” says Anil Rego, Founder and CEO, Right Horizons.
2. ATM fees
The Automated Teller Machine is the lifeline of the modern day banking customer. However, fees have been sneaked into the ATM use as well. First, there is the ATM interchange fee for transactions at other bank ATMs. Then, there are fees for using even the own bank’s ATMs beyond a certain number. While first 4 to 5 transactions (inclusive of financial and non-financial) in a month are free, fees are imposed thereafter for every financial transaction and per non-financial transaction. While using ATM is important, some banks have slapped ATM PIN generation. Then, there are charges for declines for insufficient balance.
3. Card fees
Debit cards have a lot of relevance in our lives since they are virtually cash counters. However, card fees have been hiked over the years. For example, top banks charge replacement or re-issuance charges for debit cards at over Rs 200 plus taxes. While there are no charges for using the debit card at domestic merchant locations and websites, transaction charges have been imposed at select merchants like IRCTC / railway stations. “Calling them as per industry practices, debit card fees at railway stations can range from a flat charge of per ticket, plus a portion of the transaction amount. While travelling overseas, watch out for more fees. Financial institutions impose cross-currency mark-up charges on foreign currency transactions that can be from 2-4% on foreign currency transaction carried out on debit and credit cards,” informs Rego.
Similar is the case with credit card fees and charges. However, credit card holders are generally aware of these charges which, if ignored for a long time, can not only destroy your monthly budget, but can also put you into a debt trap. That is why it is always recommended that you should use your credit card/cards only for emergencies.
4. Luggage fees
Travelling by airlines is within one’s reach now. However, the monster called fees has emerged in this scene too. If you are a frequent traveller, then this may cost you much. For instance, if you cancel your tickets up to 2 hours before departure, be ready to shell out cancellation fee of Rs 3,000 or 100% of airfare, whichever is higher. “In case you need to change something in your travel, pay fees for that too. These change fees can be Rs 2250 or 100% of airfare, again whichever is higher. Domestic baggage charges are also quite high. A Rs 5 kg prepaid baggage charge is Rs 1300-1800. At the airport, excess baggage charge is Rs 300 per kilogram. Carrying sports equipment? You may be asked to pay fees of Rs 1000. There is also an itinerary print fee of Rs 50, while ‘travel assistance’ also costs money at airports,” says Rego.