There’s an interesting book gracing the shelves of your local bookstore, ladies and gentlemen, and it covers a topic that concerns us all. Namely, the fact that businesses in the new millennium seem bound and determined to small-print-fee us into the poorhouse.* It’s called Gotcha Capitalism: How Hidden Fees Rip You Off Every Day-and What You Can Do About It by Bob Sullivan.We all know that companies are…pretty much ripping us off on a daily basis. It’s not as if they don’t have the right to charge whatever they want, but they don’t have to be so bloody sneaky about it that you have no earthly idea how much something will end up costing you. In his book Sullivan points out that we all know about the $2-$3 fee for using another bank’s ATM, but what you may not know is that your bank could charge you another two or three dollars for the same transaction. So that $20 you took out has now essentially been instantly reduced to $15. We all sort of take this stuff for granted, because is it really worth getting your dander up over a measly $2? Maybe not, but that stuff adds, up, friends. From the book:
"You didn’t fill up the rental car with gas?Gotcha! Gas costs $7 a gallon here.
Your bank balance fell to $999.99 for one day?Gotcha! That’ll be $12.
You miss one payment on that 18-month same-as-cash loan?Gotcha! That’ll be $512 extra.
You’re one day late on that electric bill?Gotcha! All your credit cards now have a 29.99% interest rate."
That last is a bit of an exaggeration. But, your credit card account will “adjust” to a higher rate if you pay your bill late. Pay late twice in a 6-month period and it’ll be jacked up to that 29% rate, all right. Oh, plus the $35 fee each time. Plus the annual fee. And cash withdraw fee. Oh, and that cash APR will be much higher, too. And the “transaction fee” of 3% to use one of those “promo rate” checks. Also, when you pay your bill, your payment is first applied to any fees, then to the interest, then to the principle. And it goes to pay off the lowest interest rate first, if you have, say, some purchase on there made with a promo rate. I used to work for a credit card company. You ever wonder why they all have a Wilmington, Delaware address? Is “The First State” some kind of wonderland for financial institutions? Yes, actually; credit card companies are based out of Delaware because that state has no cap on how much they can charge you in interest. Oh, and we can say thanks to the former Republican Congress of 2006 for the butt-fucking fact that credit card debt can no longer be dismissed through bankruptcy.Booking a hotel room is another big one. Since the advent of the internet companies have become aware that we can find the cheapest price for something just sitting at home. So they basically made it impossible for us to tell how much something really was. Hotels have taken to charging hidden booking fees, local phone and even room-to-room call fees, and at the Wynn in Las Vegas, well, they’ve just gone off the rails. The Wynn has mini bars in its rooms, just like anyplace, but if you even take something out to look at it, the Wynn will charge you for it if you don’t replace the item within 60 seconds. It has a little optical sensor and everything. Sweet tap-dancing Christ.
Bob Sullivan supposes there are probably a lot of companies that would love to do honest business. But we’re stuck in this kind of shame spiral because the ones who do can’t compete with the ones that hide their price behind a wall of fine print and bullshit. There was a hotel, for example, that started posting its true price for rooms on the internet. I’m sure you can guess what happened; their sales tanked. Customers were still paying the same amount to stay there as before, and the same or less than comparable hotels, but those other hotels hid their costs in fees for ice or what-the-shit ever. That’s the saddest goddamn thing I think I’ve ever heard.
We’ve become so inured to thinking that this is just the way things are we don’t even get upset about it anymore. And if you did, what could you do about it? Banks are probably the worst. Many banks now actually make more money on the fees they charge than from interest. Their entire business model has changed from making money through loans and finance to trying to figure out how much they can siphon off a dollar at a time before an angry mob of pitchfork-wielding villagers sacks the building.I can relate. My wife and I have a checking, savings and credit card account at a certain bank which will remain nameless. Okay, I’ll give you a hint; it’s Bank of ___(the “A” in USA)___. Wanna transfer money between your savings and checking? Well that’s easy, convenient and free online, but don’t let your savings account drop below $300 or that’ll be $3, please! I used to pay my Bank of…somewhere credit card online, but since Hanni and I opened a checking account there, I can’t. Know why? Because my main checking account is at another bank, and once you get a BOA checking account you can no longer pay your credit card bill with any other account. Man…just…FUCK YOU!
At any rate, it’s an interesting read.
*They don’t actually have poorhouses anymore. But writing it makes me feel just so delightfully Dickensian.
Sources:
NPR – http://www.npr.org/templates/story/story.php?storyId=17898418
Amazon.com – http://www.amazon.com/Gotcha-Capitalism-Hidden-Every-Day/dp/0345496132
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