If you spend any time in the frugal/budget world, you’re likely to come away with the idea that you should reject all fees. If it means switching banks, changing how you pay for things, switching airlines, or dumping credit cards, we’re taught to shun all fees. We’re taught to dodge anything that reeks of nickel-and-diming us. But there are times when paying a fee isn’t a bad thing. If the fee saves you money or hassle, makes you safer, or provides you better service, the fee is worthwhile. Just this week I found some examples of “good” fees in my life.
Bill payment: Of all the bills I pay online, only the water bill charges a fee. They don’t take eChecks or bill payment from a bank; only credit cards. They charge a “convenience” fee (a percentage of the total bill) for using a credit card. At first I balked and said, “A Fee? Heck no!” But then I looked at it more closely. My bill is so small that the fee is typically fifty to sixty cents. A stamp would cost me forty-four cents. That’s most of the fee, right there. Then I have to factor in the cost of a check and envelope (they don’t provide return envelopes) and the intangible costs of knowing that the bill was paid on time and not lost, and the (slight) environmental aspects. I also earn about 1/2 of a reward point on my credit card (about fifty cents). When you consider all of that, I more than compensate for the fee and I get the convenience and security of online bill pay.
Insurance filing: My dentist gives me a choice: I can pay for services rendered up front and then handle the insurance filing myself or, for a $2 fee, pay nothing up front and they will file the insurance. I’ll take the $2 fee, thank you. It saves me the nightmare that is filing insurance paperwork and I don’t have to wait forever for reimbursement. Worth it every time.
Good faith estimate fee: I’m looking to have some work done on my house and all of the highly recommended contractors charge a “good faith estimate fee.” I pay a small amount for them to come out and give me an estimate. If they are chosen for the work, the fee is deducted from the bill. If they are not chosen, I’m out the fee. But I don’t think it’s a bad thing. Their time is worth something and I know they get tired of doing estimates for people who have no intention of hiring them. That only drives up their costs in the end, making my final bill higher. On my end, the fee has forced me to do more research before asking for estimates so that I’m only contacting a handful of contractors that are serious contenders. This saves me from dealing with a bunch of people and appointments.
Credit card annual fee: I still balk a little a this one, but there are times when it’s not the end of the world. If the card comes with a good rewards program and you know you’ll earn more than the fee in rewards over the year, it can be worth it. Similarly if the annual fee entitles you to extra services, better interest rates (if you carry a balance), or other helpful tools it can be worthwhile. My current card just instituted an annual fee, but changed the rewards structure in my favor. I’ve opted to keep it for now since I will earn far more in rewards during the year than the fee they’re charging.
Ticket fees: TicketMaster makes me nuts. They charge all kinds of outrageous fees for their tickets so when I need tickets I always go to the box office and buy directly. I still get hit with some fees, but nothing like TicketMaster. Well, I found one instance this week where paying those fees is a good thing. I’ll be traveling in a few weeks and there is a show I want to see. I don’t live in the area, so going to the box office isn’t an option. And I don’t know anyone there that I can ask to go for me. I could chance it and hope that there are tickets available when I arrive, but this is a popular show. I’m pretty sure it will sell out. What to do? Suck it up and pay TicketMaster. At least their fees mean that I’m guaranteed to see the show of my choosing. It’s not a really good fee, but at least I’m getting something out of it: The security of knowing I’ll get to see the show.
Parking fees: I had to be downtown this week for a convention. I had two choices: I could park in the free lot, or pay the add-on fee at registration for the conventions’ “preferred parking pass.” I chose to pay for the pass because the conventions’ lot is close to the venue, patrolled, and well lit. The free lot is a distance away from the venue and not that well lit or patrolled. Since I knew I would be coming out after dark most nights, I opted for the safety the fee provided.
Recycling fee: I took some old electronics to a recycling event sponsored by a local company. They charged a small fee per item, but I felt it was worth it. There is no place here that routinely accepts old electronics or other hazardous waste, so it either goes in the landfill or clutters up my space. The only way to recycle those items here is to wait for an event like this. The small fee allowed me to de-clutter my garage without piling it into the landfill. I felt pretty good about it, considering the alternatives.
Fees aren’t always bad. If you get some value from paying the fee, it’s worth it. Where the problem comes in is if fees are excessive, senseless (Why charge me to print a paper ticket for a movie when I’m already paying for paper and ink?), or hidden. No one appreciates being jerked around or made to feel like their wallet is constantly dribbling money. When confronted with a fee, don’t automatically run the other way. Do the math and determine if the fee might actually help you. If so, it may be worth it. If not, try to find a fee-free alternative.