Stretching Your Dollar: What to Know About Junk Fees

<div class="block">Brian Vendig, president of MJP Wealth Advisors, joined Cheddar News to talk about nuisance junk fees that tend to catch people off guard at the time of payment. Vendig broke down various uses for the fees and what consumers can do to protect themselves against surprise costs.</div>

Stretching Your Dollar

Have you ever been hit with an unexpected charge that wasn't listed up front? Well, if so, you might have been subjected to a junk fee. These hidden charges can be added at the time of payment, catching people off guard. And so we asked you our viewers if you knew about the junkie debate happening in the US Senate. The response was an astounding. No, but the good news is that we've got you covered. So we're going to answer those questions and tell you what you need to know about junk fees. So joining me now is Brian Bendig, president of M JP Wealth Advisors on how we can navigate these fees. Brian, let's start by this. What are the most common junk fees that we might pay? Thanks Kristen. So these fees are uh based on processing transactions so they could be convenience fees to help to support a payment. It could be build a late fee uh in case you're late on a payment, it also can be fees that are associated with closings, let's say for real estate or for housing. So, so again, these are, these are fees that are sometimes embedded in different transactions or different things that consumers are trying to accomplish. What's the best way to educate ourselves about these fees or better yet, actually just reduce the fees together. A absolutely Chris. Well, I think the first thing is all companies are required to disclose what their fees are upfront. And I think sometimes when, uh, people sign up for a credit card, they might not read those disclosures to really understand how high interest rates could go or what late fees might be charged. Um I think also at other points in time, it's on the companies to also disclose some of their pricing as well. So from a consumer point of view, were educated. Great example of that is back in mid June, uh, President Biden, um, reached some agreements with uh, companies that are in the entertainment uh area to make sure that they're disclosing all fees any time you buy a ticket, um, uh to go to a show or to go to an event and some of those measures are starting to take place, uh, just around the corner in September. So again, transparency, I think it's really important in trying to understand the space look, a lot of people dining out. And I think some of us we definitely received sticker shock of late, maybe not just for the individual prices, but certainly the overall bill. I know at times certain fees can be added to a restaurant bill. What are our viewers need? To look out for. I think viewers just need to be, uh upfront and asking the questions and making a reservation, let's say, at a restaurant with a large party, usually there is a service fee that's added for larger groups, uh because there's more time that's, that's being spent from wait staff, you know, helping you or helping guests. And I think the, the same concept is, is also even if I just pivot in, in planning trips for hotels or resorts, sometimes there's additional fees that hotels or resorts charge in using their facilities or being on their grounds. And I think sometimes asking those questions up front helps people get more, become more educated so that you can create those comparisons to really shop wisely and see how far your money can go. So you might be paying for that restaurant bill with a credit card, Brian. So junk fees when it comes to credit cards are just overall fees. What should we watch out for? Well, I think in the in the credit card uh world, we should take a look at what are some of the late fees that are being charged at different points in time and also just looking at the overall rate of interest. And is there a, is it a fixed rate or a promotional period? And understanding and knowing when that's going to expire? So then you're not surprised when an interest uh charge hits your account in the future? So, having a deliberate process and understanding how the credit cards work or how a bank account might work as well because sometimes we see a lot of fees sometimes charged for overdrafts and then having the ability to plan for that in advance, I think has always made sense. We mentioned earlier that junk fees are a topic of debate currently in Washington. What do we know about the legality of junk fees? Well, again, companies are required to disclose, uh this information to consumers up front. And I think it's a two way street to say how that information is being disclosed to a consumer and is our consumers taking the time to read it. Um, and I think the, the point of where some of the debate with federal agencies, as well as the Senate debating these topics is to try to figure out where's the balance between the two. So that again, uh, companies are able to operate their businesses appropriately at the same point in time. Consumers are understanding what they're actually using as a means to facilitate their transactions. And one thing I would say though is that there's a full plate of policies and, and agendas and things that Congress is trying to get back to, uh, in September when they come back from, from sessions. So, uh summer session. So I don't know if a lot of these fees are necessarily going to go away or be, be resolved in the near term, but I think it's an active debate and I think there is some progress around transparency that will help consumers moving forward. Financial jargon is something that we try to talk through a lot here on this show. Are there common terms or phrases to look out for when navigating bills and payments when it comes to extra fees? That's a great question, Kristen. Yes. I think that the, the best way to summarize that is you're gonna see things just very clearly disclosed as a delivery fee, a resort fee, uh a processing fee, an overdraft late. You know, these are all the catchy words that are there. And again, if you feel that some of these fees are being charged just due to bad timing, sometimes these fees gets charged because a deposit has yet to clear in your bank and then a payment gets made and the bank might charge you an overdraft fee. I think it makes sense for consumers to bring up some of these timing differences because a lot of these companies, if it's, if it's reasonable, they might also be able to reverse and work out those fees with you. So it's not always a zero sum game. But again, I think your point, Kristen, you know, reviewing those monthly statements staying on top of activity, putting alerts on your phone when charges hit your credit card or hit bank accounts. These are ways that people can stay informed and not let these fees pile up or have these surprises on an ongoing basis in terms of change from Washington, Brian, any expectation as to how these fees might change going forward? Well, I think the one thing that we are seeing in legislation that's being passed, not only at the federal level, but also at some state levels is that caps are being put in place so that if you have to charge a fee, it's not gonna be a fee that's going to be uh enormous or, or, or outside of what's what's contribute uh considered uh traditional in the, in the scope of business. So, for example, you know, uh there could be uh regulation that I've seen recently passed in some states that say you're only gonna be able to charge a certain amount when you process, let's say a mortgage application or a renter's application. So I think what we're going to end up seeing moving forward is caps that are being put on some of these uh fees. But also regulatory agencies also continuing to crack down on companies that are charging more than what their contracts say uh uh when working with consumers or customers. So again, I think striking that balance between the two is, is where the regulations are looking to go. All right, Brian Bendig, president of M JP Wealth Advisors, Brian, thank you.