Call it fee-flation: Americans are being slammed with hidden fees from almost every direction, forcing us to pay more for goods and services than we budgeted for.
Fees lurk in our cable and mobile phone bills; are tacked onto airfares, hotel room rates, and car rentals; and are quietly levied on our checking accounts—to name just a handful.
Individually, such fees can be modest and might not seem worth getting upset about. But together they add up: We spend more than $64 billion a year in junk fees, according to a White House analysis—more than $500 per household.
To be sure, not all fees are a problem. What makes some junkier than others is that they should have been included in the advertised price—not sprung on you at the last minute. That’s especially true of fees you can’t avoid unless you abandon the purchase entirely, such as some airline fees.
In other cases, says CR’s director of financial services policy, Chuck Bell, a fee is problematic simply because it’s excessive. Being charged $29 for overdrafting your checking account by $1 is a good example, he says.
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Junk fees make it difficult to comparison shop, and they increase the costs of things. With event tickets, for example, “convenience” and other fees can boost the final price by 20 percent or more.
Fortunately, change may be coming. Spurred by the Biden administration—as well as CR advocates—the Federal Trade Commission, the Consumer Financial Protection Bureau, the Federal Communications Commission, and other agencies have proposed rules that, if enacted, would limit a range of junk fees. At press time, the CFPB was expected to finalize a rule to limit fees for late credit card payments to no more than $8 or 25 percent of the minimum balance due, vs. the $30 to $41 that credit card companies currently charge. The rule would take effect in the spring.
The administration is also supporting the Junk Fee Prevention Act, which would require that the fees tacked onto concert and theater tickets, hotel resort fees, fees for families to sit together on airplanes, and others be disclosed up front to consumers when they’re shopping online.
Here, we highlight some of the most egregious fees and suggest ways to minimize or avoid them.
Airline
Boarding Pass Fees, Seat Selection Fees, and More
Airlines are aggressive players of the tacked-on cost game, asking travelers to pay extra to avoid every conceivable discomfort of air travel. Many, for example, charge $5 and up extra to choose a seat in advance, to avoid being assigned one when you check in.
Illustration: Peter Ryan Illustration: Peter Ryan
“Don’t count on sitting with your friends or family” unless you’re willing to pay extra for everyone, says William J. McGee, a senior fellow for aviation and travel at the American Economic Liberties Project. (The Junk Fee Prevention Act would require that airlines let families with young children sit together free.)
Another opportunity to exact fees: early boarding. So you can beat the crowd and find room for your bag, Southwest charges begin at $30, United at $24, and Frontier at up to $12.
Even mundane requests can cost you. Checking in with a counter agent will set you back $25 at Frontier Airlines. At Spirit, printing out a boarding pass at an airline counter costs $25.
What to do: First, know that some airlines don’t charge all these fees. Southwest, for example, still allows you to check two bags free. Alaska Air still lets you make free seat selections. Second, you can sometimes bypass fees by downloading an airline’s app to your smartphone. That way your boarding pass will be on your phone.
Finally, note that fees will often be more transparent if you book directly with an airline’s website or through a travel agent, rather than with a third-party travel website such as Expedia or Orbitz, McGee says.
Additional info: Check CR’s guide to hassle-free flying.
End Junk Fees Now!
CR is urging the FTC to rein in junk, hidden, and optional fees. If you agree companies should clearly disclose fees so that you can understand them before buying a product or service, sign our petition.
Car Rental
Toll Transponder Fees
Many rental car companies charge a daily fee to use their toll transponders. Alamo, Avis, Budget, Enterprise, and National charge $3.95 to $4.95 a day. You can choose to opt in when you pick up the rental.
Illustration: Peter Ryan Illustration: Peter Ryan
The problem is that opting out can trigger even bigger fees. Hertz, for example, charges $4.95 to use its transponder if you activate it in advance—but $9.99 a day if you opt out and then drive through a toll. Sixt charges a $5 per toll “administrative fee” if you opt out and then drive through a toll.
What to do: If you have a transponder for your car at home, you might be able to bring it with you for use in the rental—provided you’ll be traveling in a region where your transponder is accepted, and your state allows you to move the unit from car to car. (Some may require you to add the rental to your account.) If not, it makes sense to agree to the transponder fee when you pick up the car.
Additional info: Use these 10 tips to get the most out of a tank of gas.
Hotel
Resort Fees, Destination Fees
Once upon a time, “resort” fees supposedly covered amenities that went above and beyond the basic services you expect from a hotel—exclusive beach access, for example, or gym facilities. These days you generally have to pay these fees (which average about $25 a day) whether you use the fitness room or not. Many hotels in U.S. tourist meccas like Las Vegas, Miami, and New York go further, charging what they call “destination fees” merely for the privilege of booking a room. Those fees can run around $50 a night on top of the advertised room rate.
What to do: Complain, then negotiate. Call the hotel, request a full list of fees, and ask to have them waived—or, if the fees are fixed, for the room rate to be reduced by the same amount. To increase your chance of success, avoid paying in advance, haggle before you check in, and book directly with the hotel. (They often won’t budge on rates you get through third-party booking websites, McGee says.)
Also, book through a travel agent, who may have access to deals and discounts that essentially offset the fees.
Additional info: CR shows you how to find a more flexible travel credit card.
Restaurant and Food Delivery
Credit Card Processing (aka “Swipe”) Fees, Kitchen and Service Fees
In the face of increasing costs, some restaurants are charging for things that used to be built into their menu prices. Some charge a “service fee” or “kitchen fee” of around 5 percent to 20 percent, purportedly to help compensate “back of house” staff. That’s in addition to the 15 to 20 percent tips that servers typically expect.
Illustration: Peter Ryan Illustration: Peter Ryan
Restaurants also increasingly charge a 1.5 to 3 percent fee for paying with a credit or debit card, effectively passing on to you the processing fees they pay on those transactions.
And if you’re looking to have food delivered, you may be charged higher per-item prices when you order through a third-party delivery service such as Uber Eats, Grubhub, or DoorDash.
What to do: Except in Connecticut, Maine, Massachusetts, and Oklahoma, where it’s illegal, restaurants can charge “swipe” fees. But they have to tell you that up front, says CR’s Bell. If they don’t, ask to have the fee waived (or for an equivalent discount).
Food delivery fees, on the other hand, are hard to get around. The only way to possibly avoid the menu upcharges and service and delivery fees is to call in your order directly to the restaurant, pick it up yourself, and pay in cash.
Additional info: Is that food you ordered coming from a "ghost kitchen"?
Banking
Account Maintenance Fees, ATM Fees, Insufficient Funds Fees, Overdraft Fees
Some banks charge $5 to $35 a month for maintaining a checking or savings account. And many charge a fee if you withdraw cash from an out-of-network ATM; the average is $4.73 per transaction, according to a 2023 Bankrate study.
Many banks also charge overdraft fees for allowing a check or other debit transaction to go through when you don’t have enough funds to cover it. On the flip side, they may charge an insufficient funds (or NSF) fee when they instead decline a transaction on an overdrawn account. Both range from $19 to $38 per transaction.
What to do: While ATM and account fees might not qualify as “junk” fees because it’s reasonable for banks to charge for the services, what’s clear is that they can be avoided.
To avoid ATM fees, choose a bank with a lot of nearby in-network ATMs or look for one that’s part of a large ATM network such as Allpoint, Co-op, or MoneyPass, which are mainly used by online and community banks and credit unions. To figure out which network is best for you, use the ATM locator tool on the bank’s website.
To avoid account fees, make sure you’re enrolled in the type of account that suits your financial situation: Your bank may offer multiple checking account options—some that minimize fees if you maintain a sizable balance and others that keep costs low if you don’t. Another option is to switch banks. As with ATM fees, online banks and credit unions are likely to offer free or low-cost accounts.
Switching may also be wise if you’re being hit with hefty overdraft or NSF fees. Bank of America, Chase, and Wells Fargo have eliminated NSF fees; Citi has gotten rid of overdraft fees; and some online banks and credit unions have eliminated some of those fees too.
Additional info: Learn how to choose the right bank.
Payment Apps
Transfer Fees
The “peer-to-peer,” or P2P, payment apps Cash App, PayPal, and Venmo charge a fee of between 0.5 and 1.75 percent of the transaction if you want incoming funds transferred to your bank account immediately, rather than in one to three business days.
Illustration: Peter Ryan Illustration: Peter Ryan
“Companies pass on the fees they get charged for instant transfers to customers, and it’s not fair,” says Ed Mierzwinski, senior director of federal consumer programs at U.S. Public Interest Research Group (PIRG). “You should have immediate access to your money, without penalty.”
What to do: You can have your money transferred to your bank account free of charge if you’re willing to wait one to three business days for it. If you routinely need instant access to incoming P2P funds, however, consider using Zelle, which partners directly with banks and transfers money immediately for no charge.
Additional info: See this special report about the potential consumer risks CR found for users of Apple Cash, Cash App, Venmo, and Zelle.
Broadband and Pay Television
Broadcast TV Fees, Regional Sports Fees, Infrastructure Fees, Network Enhancement Fees, Deregulated Administration Fees, Technology Service Fees, and More
Some fees are mandated by the government, but cable, internet, and satellite television bills are rife with company-imposed fees. These often include broadcast TV fees, regional sports fees, modem and router equipment fees, and infrastructure fees. These let providers advertise low monthly rates while actually charging customers much more.
The Federal Communications Commission has proposed requiring providers to create a standardized label, modeled on the familiar food nutrition label, that would list prices, including fees, in a uniform way.
What to do: Call the company and threaten to cancel your service if it doesn’t drop the company-imposed fees. If that doesn’t work, keep in mind that millions of American households have “cut the cord,” opting to get their video programing from an internet streaming service such as Fubo, an over-the-air digital antenna, or both, rather than via traditional cable services.
Additional info: Find out how to replace cable TV for less than $25 a month.
Editor’s Note: This article also appeared in the March 2024 issue of Consumer Reports magazine.
Lisa L. Gill
Lisa L. Gill is an award-winning investigative reporter. She has been at Consumer Reports since 2008, covering health and food safety—heavy metals in the food supply and foodborne illness—plus healthcare and prescription drug costs, medical debt, and credit scores. Lisa also testified before Congress and the Food and Drug Administration about her work on drug costs and drug safety. She lives in a DIY tiny home, where she gardens during the day and stargazes the Milky Way at night.
