Free checking accounts but 2 bucks to use the ATM. Read this article and think of ways in which the sticker price is not always the true cost.
Friday, December 15, 2006
The Hidden Fee Economy
Free checking accounts but 2 bucks to use the ATM. Read this article and think of ways in which the sticker price is not always the true cost.
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6 comments:
I think that it is ridiculous with the ways that different companies and places go about with creating hidden fees. It is just like the fine print of a contract, you have to read into everything before signing the dotted line. What I really can't stand is the cell phone companies that advertise no hidden fees, but they do have hidden fees; they are not the same as another companies. As the article said, hotel chains use hidden fees with meals, open bars, and phone calls just to name a few. I guess they want to make more money in a sort of less-ethical way. The end result of all hidden fees is for a company to make more money. I think hotels should allow customers to purchase passes which last for a certain amount of time and they are used for an unlimited access to the things that are not included in the room price. More people would probably buy those and use items with hidden fees more often. In Disneyworld, you can buy a certain mug and get free drinks everytime you use the mug. It is easy for the customers and the workers to do that than have to pay every time for a bottle of soda.
Well, I think the majority of things have sticker prices. That is how many companies make money. For example the commercials we see in tv about cars; they say a "low" price but in the bottom in really small letters (which you cant even read)it tells you there is more to be added to that given price. If they give things for low prices, companies HAVE to find other ways to make more money.
I loved this article because I actually just saw a special on CNN called A Paycheck Away. It was about people who live paycheck to paycheck; people who are unprepared for the unexpected. They revealed traps that people fall into, which result in mounting debt and even homelessness. One of the biggest culprits: credit cards. The hidden fees are what make credit card companies profitable. Without interest rates they would never make a cent, but even beyond that, they offer risk-free "low introductory rates" which are only risk free if you can pay on time. If you cannot pay the minimum or pay late even just one month, your interest rates can soar from 8% to 22%. And in the world today, where people put everything on credit cards, interest rates can sic them with thousands of extra dollars to pay each month. While its understandable why market sectors like credit card companies and hotel chains have hidden fees, it doesn't take away from the destruction they can cause.
Hidden fees are a very smart, sneaky way for companies to make a little extra off of their consumers. Such as in the hotel example, it is easier to trick someone into staying in a cheaper hotel room because if that person is a "myope" they will not be aware of the hidden fees that could add up to even more than if they had stayed in a higher-priced room with cheaper extras. It is an easy way for companies to lure consumers in and then make even more money off of them than they expected. Consumers need to become "sophisticates" and do more research on what they are buying so they can avoid hidden fees, because it is much easier for a dishonest company to advertise cheaper rooms than it is for the more honest one to say "Our Mini-Bar Cheetos are $1 cheaper!" Lack of research screwed me over when I got a used car because after I purchased it I ended up paying that same price to repair things on it that the seller never told me about. I feel so myopic.
i find it hard to belive that there are people that dont know about this kinds of stuff. i mean it is common knolwage that some places dont accept amex. yes amex the credit card. reason being it takes the largest percetnage of all the credit cards. thats right not only do the charge the card holder intrest but they also take a percentage of the sale from the person who accepts the card at the store. there isnt much you can do about it cause either way you do it you get screwed. like the using cell phones at the hotel exzample they mentioned, well cell phones have roaming charges which your paying more on the cell phone bill. but what do you expect out of the world we live in today everyone is trying to post record profits so their stock goes up and their investors are happy.
The advertising world is a very strange and at some times frustrating place. I constantly run into problems when it comes to my cell phone. “FREE PHONE (when you sign up for an eternity of service !)”. Obviously ads have targets and very intelligent people design them. Hidden fees are a business’s way of luring a customer with low prices but then having a way to make all that profit back without damaging appeal. Since I know never to even open the mini bar, I say go ahead have the hidden fees. Maybe people shouldn’t be so flagrant with there purchasing and shouldn’t we all know to look into everything before making a rash decision. Is it just me or are car commercials advertise highway miles per gallon all of a sudden? Probably because everyone wants to save on gas. There goes those marketing people searching for interest again. And rebates shouldn’t be taken out of the advertised price if its not going to say AFTER REBATE in big print somewhere. (and i love fees for taking money out of the ATM)
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