9 Sneaky Charges And Other Money Traps

9 Sneaky Charges And Other Money Traps.  Don't you just hate it when you end up spending more than you have to?   It's one of my pet peeves; specially when the "large print" keeps touting affordability but the "fine print" keeps making you shell out more money.  So I figured I'd put together some of these "money traps". It's not a bad idea to pay for them, but it's always a good idea to know these things in advance. That way we can be proactive, learn to ask, and take control of the conversation. Instead of just let the other person dominate the conversation with rosy pictures and sales pitches.
Don't you just hate it when you end up spending more than you have to? 

It's one of my pet peeves; specially when the "large print" keeps touting affordability but the "fine print" keeps making you shell out more money.

So I figured I'd put together some of these "money traps". It's not a bad idea to pay for them, but it's always a good idea to know these things in advance. That way we can be proactive, learn to ask, and take control of the conversation. Instead of just let the other person dominate the conversation with rosy pictures and sales pitches.

Retail Stores

I used to hear my brother joke about stores jacking up prices before sales, so they can put up 70% off signs without actually giving up any profit.

Years later, I heard this interesting anecdote: Someone I know was going to buy an expensive, branded shirt. Luckily, he heard there was going to be a sale in a few days. So he didn't buy it then and came back during the sale. Curiously, even after applying the discount, the shirt was now slightly more expensive than before.

I haven't experienced it personally, and you should obviously take 2nd-hand (and, in this case, 3rd-hand) information with a grain of salt. But it can't hurt to be aware of prices though.

Hotels

Some items in your room are complimentary. But other items in the room may not be. Best to clarify if all are complimentary, and which is which if not.

Real Estate

You'll typically see real estate agents handing out fliers of properties for sale with very small or even 0% down-payment.

But then there's a whole host of fees and documentation you have to pay for that isn't mentioned. Reservation fees, documentary stamp taxes, fees for processing and/or transferring the title, are just some of the things you'll end up paying for.

(For more hidden real estate fees, check out Burn's post about the hidden cost of buying a house or condo.)

Cellphones

Hopefully these don't exist anymore. But back then there were ringtones, ringbacks, and other messaging services that sometimes crop up and drain your prepaid credits. Sometimes you did sign up, but even after opting out the "service" didn't stop and kept on charging you.

In the age of smartphones though, the problems are usually apps that connect to the internet without you knowing it and run up your data usage. A lot of postpaid plans now have anti-billshock features (alas, prepaid phones just keep running out of credits). But all that means is that you still pay more than you really intended - just not an astronomical bill.

Banks

Inter-regional banking charges
This one isn't so sneaky (they inform you upfront), but there's really no reason for it anymore. It's not like the bank is actually sending your money via courier. And in this digital age, it's not like they need to pay for a telegraph or a phone call to arrange it with their branch either. It's just a needless fee to get more money out of you.

Low-maintaining balance accounts
I really hate this one. I mean, what's the point?

It looks great at first. Something like Php500 to open and maintain a bank account. Hooray, saving (in a bank) is made easy! And then you find out there's a fee for each withdrawal - and sometimes even for each deposit.

But at least they usually tell you about it. So it's not that sneaky. It's still a money trap though.

Add-on interest rate
It's appears like a small interest. But since it applies to the total laon amount, and applied each month, it's actually just a sneaky way of saying you're paying something big like 30% interest in a year.

When talking about interest, remember to ask and take note of two things: How much total interest is paid for the duration of the loan, and how much interest is that per year. Juts so it's easier to grasp the real amount that's being discussed.


In-house Financing

When it comes to in-house financing, you might come across one that says "no chattel mortgage". Which is great, since that's usually one of the big expenses when taking out a loan.

But if you compare the rates and total payments, you've actually paid for it - and more.


You

Alas, the worst money trap can be ourselves. Even perfectly acceptable loans can be money traps if we take on too much and/or too soon.

And with an expansive assortment of impulse buys and status symbols available out there, it can be pretty easy to lose track of our finances or misjudge certain items as must-haves or reasonable buys.


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photo credit: sunnyUK via photopin cc

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