Fight Back Against Fees: Tips for Military Families

By Barbara O’Neill, Ph.D., CFP®, boneill@njaes.rutgers.edu

woman looking at empty wallet
Photo by Andrea Piacquadio from Pexels

Pesky fees for various products and services (e.g., cell phones, travel bookings, tickets, ATM withdrawals, and bank/investment accounts) can take a big chunk out of household budgets. This is especially true for military families who move frequently and may need to pay fees for travel, inactive accounts, and utility hook-ups. Seemingly “small” charges can really add up over time!

According to one recent survey, at least 85% of Americans have encountered an unexpected or hidden fee over the past two years. Fees are often buried in the “fine print” of a sales contact or they pop up on the final page of an online purchase.

One reason fees have proliferated is the rise of online shopping websites. Sellers make products appear competitive in online searches by disguising part of the price of items as a fee.

Personal Financial Managers (PFMs) may be able to help military families close budget gaps by reducing fees or eliminating them completely. Following are five tips from consumer advocates and government agencies:

  • Move Your Money– Follow the “Rule of Three” and compare fees charged and minimum balances required by at least three financial institutions. Credit unions often charge lower fees (e.g., overdraft fees) than “brick and mortar” banks and are more likely to offer free checking. Also, ask about “basic” bank accounts with no minimum balance requirements and low monthly maintenance fees.
  • Go Electronic– Access financial accounts online because some financial institutions charge $1 to $5 to mail a monthly statement. Go one step further and set up an automatic transfer from savings to checking accounts to avoid a non-sufficient funds (NSF) charge for “bounced” checks. Transfer fees are typically less than half the cost of NSF fees, which can run as high as $25 to $35. Retailers typically charge NSF fees also.
  • Stay in Your Network– Use only ATM machines within your financial institution’s network to avoid fees charged by “foreign” (i.e., out-of-network) ATMs, typically several dollars per transaction plus a $5 to $10 service fee. Some of the highest “foreign” ATM fees can be found at casinos, stadiums, fairgrounds, amusement parks, convenience stores, airports, and other remote locations that are not located near banks.
  • Beware of Cancellation Fees- Ask how long you need to purchase a product or service or keep an account open to avoid a cancellation fee. Then make plans accordingly. Service members, however, have a unique benefit if they have to exit some contracts early. Under the Servicemembers Civil Relief Act (SCRA), they may terminate a real estate or vehicle lease if they deploy or receive PCS orders for at least 90 days.
  • Switch or Speak Up– Consider switching service providers (e.g., cable television, cell phones) for a better deal if you have a choice of vendors. Another option is to call a current vendor and insinuate that you may switch unless you get a better deal. Fees can sometimes be waived by comparing prices and speaking up.

For more fee-fighting tips, review this Consumer Financial Protection Bureau publication.