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BOTTOMLINE April 20th 2007
Even if you excel at managing your money, you may be surprised at some of the hidden fees and surcharges you regularly pay -- and could avoid. Linda Sherry of Consumer Action, a national nonprofit advocacy and education organization, has seen all the tricks of the trade and has great advice on how to avoid paying sneaky surcharges for credit cards, cell-phone plans, airline tickets and more.
Another great way to put cash in your pocket is to shop smarter. For many, that means buying organic products in order to eat more healthfully. But organic products are often more expensive than conventionally produced ones. Ronnie Cummins of the Organic Consumers Association offers great advice on smart shopping strategies that will save you money on organic food
Avoid Sneaky Fees and Surcharges on Credit Cards, Cell-Phone Plans, Airline Tickets and More
Linda Sherry Consumer Action
mericans are facing a wave of fees and surcharges for almost every service. Credit card holders recently paid more than $15 billion a year in penalty fees. Many retailers can't raise their prices because the business environment is so competitive. Instead, they bury high fees in the fine print of contracts or simply neglect to inform you about additional costs until your bills arrive. The charges can be outrageous. Example: A typical bank overdraft, or "insufficient funds," fee on a bounced check runs $25 to $35 ( estimated cost to the bank: $1).
Not only do such fees siphon hundreds of dollars a year from your wallet, they make it harder to know the true cost of purchases so that you can comparison shop for the best deals.
How to avoid being overcharged for common products and services...
ON-LINE TRAVEL
Penalty fees. When you need to change an airline ticket, many airlines charge $25 to $100. Canceling a hotel reservation may trigger a fee as well. If you book through travel Web sites, such as www.expedia.com ... www.travelocity.com ... www.orbitz.com ... or www.cheaptickets.com, you also will be hit with their penalty fees ( amount: $30 to $50 per ticket).
Self-defense: To avoid a double penalty, book your hotel or airline directly if you think you might have to make changes.
SHOPPING
Restocking fees. Many retailers charge a fee if you purchase an item and then return it. Amount: 10% to 20% of the cost of the original item. Example: Electronics giant Circuit City charges a 15% fee for returns of digital cameras, desktop PCs, notebook PCs and printers and a 25% restocking fee for home-theater equipment.
Self-defense: Ask about restocking fees. For instance, you may not have to pay if you return the merchandise unopened within 14 days.
Handling and/or packing fees. Most Web sites require you to purchase a hefty dollar amount of products -- say, $100 worth -- to be eligible for free shipping. Some sellers on the on-line auction site eBay offer free shipping but may charge for such extras as insurance ( amount: $5 to $15 per item), making any shipping savings negligible.
Self-defense: Look skeptically at "free shipping" offers. Check the total amount that you have to purchase to be eligible. If you shop on eBay, find out about additional fees.
BROKERAGES & INVESTMENT COMPANIES
Account maintenance charges. Investors with less than a certain amount in their brokerage accounts -- typically $10,000 to $25,000 -- are charged about $25 per quarter. Investors who trade infrequently (less than three times a quarter) also may face a $10 or higher "inactivity" fee per quarter. Mutual fund firms often charge annual administrative fees of $10 to $25 for any accounts, including IRAs, that fall below a certain minimum.
Self-defense: It's best to choose brokerages that don't charge maintenance fees for most accounts, such as Etrade.com and Siebertnet.com. Also, maintain all your taxable and nontaxable accounts at the same investment firm or brokerage -- your combined account total might allow you to avoid maintenance fees. Inquire about linking accounts that are not listed under the same Social Security number. For example, if three members of your family have IRAs at the same firm and the total for your combined accounts surpasses the minimum, you all may be able to avoid fees.
OVERNIGHT MAIL
Remote surcharges. The major carriers -- FedEx and UPS -- bill extra for "out-of-the-way" areas ( amount: $1.50 and up). But many of these locations are actually residential areas in cities such as San Diego, Miami Beach, Phoenix and Atlanta. To find out if a zip code is considered remote, call 800-463-3339 or 800-742-5877.
Self-defense: Whenever possible, send the package to an office instead of to a home. Reason: UPS and FedEx apply the remote surcharge only to shipments to residences. Or send the package by overnight mail through the US Postal Service. The rates are comparable, and remote surcharges are not levied.
CELL-PHONE PLANS
"Federal Recovery" fees. Wireless companies advertise a low base price without mentioning that your bill will be inflated by government-mandated charges, such as the Federal E911 Fee ( amount: $1 to $3 per month, depending on the state) and Number Portability Service Charge ( amount: $1 to $3, depending on the state).
Some companies even tack a Regulatory Cost Recovery fee on bills to high-speed Internet customers ( amount: about $3, depending on the state). This fee sounds as if it is required by law. Not true. It's just a way for companies to increase their revenues.
Self-defense: Factor in additional fees when you comparison shop for cell-phone plans. These fees will increase a plan's base cost by 10% to 25% each month. Negotiate for reduced charges before you sign up. Cell-phone companies are so competitive nowadays that even if they won't eliminate the fees, they may be willing to give you more minutes or throw in a better phone. Helpful: www.saveonphone.com/wireless.html (enter your zip code and click on "Rate Plan Finder" to compare wireless plans).
CREDIT & DEBIT CARDS
Late penalties. Credit card companies try to trick you into paying late, such as cutting the grace period (from the time of the charge to when payment is due) from 31 days to as little as 20 days ( amount: $15 to $39).
Self-defense: You must be notified about any changes to grace periods at least 15 days before the changes take place. Federal law requires that you receive your bill at least 14 days before the due date. If it doesn't arrive on time, complain to the bank's regulator -- FDIC for banks (877-275-3342) or Office of Thrift Supervision (800-842-6929) for savings and loans.
You must pay on time even if you don't receive a bill. If you can't pay in full, pay the minimum amount due immediately. If you sometimes do pay late, consider Providian's Real Rewards program (800-249-1939, www.providian.com ). Cardholders can use the points earned by making purchases to offset late fees and fees for exceeding the credit limit. They also get 500 points for paying on time for six consecutive billing cycles. Your points also can be redeemed for rewards, such as gift cards at Barnes & Noble and Macy's.
Convenience fees. Some merchants charge you this 3% fee on your total purchase for using a credit card.
Self-defense: Tell merchants that you prefer using your debit card and its PIN -- rather than signing by hand -- so you can avoid this fee.
General Strategies
Poorly trained phone representatives often pass along misinformation. You will have a better chance when you dispute a charge if you have jotted down notes. Include the date and time of the call... full name/ID number of the phone representative... the phone number you called and the rep's extension... and what you were told. Other smart strategies...
Get it in writing. Always request that fee information you receive over the phone be E-mailed or faxed to you.
Request that late fees be waived. They often are waived, as a courtesy, the first time if you ask or if you haven't incurred any penalty fees within the past two years. Skim the inserts. Notices of higher fees and changes of terms usually are tucked into a packet of solicitations or in hard-to-read disclosure paragraphs. You don't need to read everything. Just focus on the numbers amid the legalese, and read those sections.
Bottom Line/Personal interviewed Linda Sherry, director of national priorities at Consumer Action, a national nonprofit advocacy and education organization headquartered in San Francisco. For free consumer protection reports, go to www.consumeraction.org .
How to Save Money on Organic Food
Ronnie Cummins Organic Consumers Association
 any people who would like to eat organic fruits, vegetables, dairy, meat and poultry are put off by the high prices. Organic foods can cost 25% to 100% more than regular foods -- but if you're willing to do a bit of sleuthing and look beyond traditional grocery stores, you can find organic products for much less.
My organization's Web site, www.organicconsumers.org , has links to most of the resources suggested below...
 Compare prices of conventional and organic foods when shopping at regular grocery stores. Occasionally, the price gap narrows dramatically, or organic foods may even be cheaper.
Shop at a farmers market. You can find bargains if you prowl around the stalls of your local farmers market. You'll save even more if you haggle. Farmers may be especially willing to negotiate prices if produce is misshapen or closing time is approaching.
Sample savings: Organic apples at a farmers' market often are 25% to 50% cheaper than organic apples at grocery or natural-food stores.
Consider purchasing a share in a community-supported agriculture program (CSA). There are more than 1,000 of these programs around the US. Through a CSA, you purchase produce from an organic farmer in a region near you. You'll receive a weekly basket that contains produce, flowers and perhaps even eggs and milk. A share in a CSA typically costs several hundred dollars for one growing season, which could last half a year (prices vary dramatically depending on location). In mild regions, such as California, you can receive just-picked produce year-round. Each week it's fun to discover what goodies are in the basket.
Sample savings: In rural Minnesota, where I live, I pay $450 for the season and split my weekly harvest with another family. This is at least 50% cheaper than store prices.
Helpful: Most CSAs deliver produce orders to a central location. You may be able to reduce the price of your weekly delivery if you allow your front porch to serve as a delivery spot for your neighborhood.
CSAs can be found at the Web site of Local Harvest ( www.localharvest.org ), as well as on my Web site.
Join a food co-op. Co-ops typically offer high-quality organic food and produce at a discount for members. You may be required to volunteer your time for a certain number of hours each month. For a list of co-ops, see my organization's Web site.
Buy in bulk. This is a great way to save money on long-lasting and nonperishable organic food, such as dried beans, lentils, pasta, rice, cereals, trail mix, nuts and even peanut butter. Health-food stores, Whole Foods, and even some supermarkets sell bulk items. Cheaper still: Join a wholesale buying club (regular yearly membership fee is between $35 and $50). The minimum order for the club I belong to is $1,000 every three months, so I share a membership with several families in my area. Typical savings: 30% to 50% off retail.
There is no national directory of buying clubs. Ask your local natural-food store for the names of its organic-food suppliers and contact them.
Eat seasonally. You're sure to overpay if you buy organic fruits and vegetables off-season. That's when you want to buy frozen or canned. When produce is bountiful and cheap, you may want to can, freeze or dry it for the coming months.
Bottom Line/Personal interviewed Ronnie Cummins, national director of the Organic Consumers Association, a nonprofit organization that promotes food safety, children's health and environmental sustainability, Finland, Minnesota. www.organicconsumers.org . He is author of Genetically Engineered Food: A Self-Defense Guide for Consumers (Marlowe & Company).
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