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Watch out for hidden fees!

Watch out for hidden fees!

Category: Money

Updated: 06/06/2017
First Published: 08/12/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

You may be strict when it comes to your spending, but even the most budget-conscious of us can be caught out when it comes to hidden fees – in fact, research has revealed that Brits are collectively hit with £1.2bn worth of hidden fees every year, so make sure you're on your guard!

Unexpected extras

The figures, from Amigo Loans, reveal that a huge number of consumers are stung by additional charges, with everything from booking fees to unexpected service charges on restaurant bills taking their toll. Many of them are sprung on unsuspecting consumers at the last minute, and by that point they may be too committed to the purchase to cause a fuss – or in some cases, to even notice.

But just what hidden fees are costing you the most? Well, Amigo found that the fees charged by 0845 and 0870 telephone numbers have impacted the most people in the last year, with 30% of respondents being affected. Up next were all those sneaky charges for using your credit card to purchase products online (28%), followed by surprise booking fees when buying tickets (23%) and service charges at restaurants that aren't made clear on the bill (22%).

Others include luggage fees on flights and unexpected overdraft fees (both affecting 17% of respondents in the last 12 months), surcharges for opting for paper bank statements (10%), amendment fees on legal documents (3%) and free trial fees, with 10% of respondents failing to cancel their subscription before the free trial came to an end.

These costs can quickly add up: airlines can charge as much as £25 for hold luggage while restaurants can add 12.5% onto the bill, and banks can charge seemingly extortionate rates for overdrafts and paper statements. Then there are booking fees, which can sometimes add as much as 10% to the face value of your ticket. Combined over the year, all of this can easily take its toll on your finances, and you may not even notice.

Be vigilant – and proactive

"People encounter hidden fees all the time in everyday life, but just because we are used to them, it doesn't make them acceptable," said Glen Crawford of Amigo Loans. "People should be able to see exactly what they are paying upfront and should never get a sting in the tail from a sneaky fee thrown in at the last minute or weaved into the small print."

So just what can you do? Well, aside from always being on your guard so you know exactly what you're paying, we've compiled a few top tips to make those extra charges slightly less daunting:

  • Be aware of the costs involved with checking in your luggage, and if you can, try to stick to hand luggage only. Many airlines will include a baggage allowance as part of the flight cost, too, so always make sure to check the small print before you travel.
  • Not happy with the overdraft fees of your current account? Then switch! Many accounts pride themselves on offering fair and transparent overdraft fees, some of which can be exceptionally low, so if you think you're being charged too much, make sure to compare the alternatives.
  • In many cases, service charges on restaurant bills are discretionary, and while leaving a tip is always preferable if you've received good service, this should be the only motivation. In other words, don't leave the tip just because it's already written on the bill – if you weren't happy with the food or service you received, cross off the service charge and tell your waiter that you're only going to pay for the food. Everything else should be optional.
  • If you'll be charged booking fees and there's no other way to pay for your tickets (such as by heading to the box office in person), look for other ways to cut costs instead. This could be by scouting out appropriate voucher codes, for example, or simply performing a quick search online to see where you can buy your tickets from the cheapest – it needn't take long, but it could make the booking fee a little less taxing on your wallet.
  • Signed up for a free trial of a usually paid-for service? Then diarise the date that the free trial runs out and make sure to cancel it beforehand! Far too many people get caught out with this kind of thing, but a simple note in your calendar can ensure you don't pay for something you don't really want.
  • If you're charged for making a credit card purchase online, make sure you're not being caught out elsewhere, for example by using a 0% purchase credit card to avoid extra interest. Alternatively, use a cashback credit card, as that way at least you'll be getting something back from your purchase.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.