As a consumer, you work hard to make smart financial choices, whether it’s snagging a good deal or sticking to your budget. But sometimes, what seems like a great offer can come with unexpected costs that aren’t so obvious at first glance.
These hidden charges can quietly eat into your savings if you’re not careful. Let’s uncover simple ways to shop wisely and keep these extra costs from creeping into your purchases.
Kinds of hidden fees and charges
The following are the different kinds of fees and charges that you may encounter when transacting online:
Platform fee: A platform fee is a charge added by online platforms or websites for using their service. It’s often not mentioned until the very end, so it can catch you by surprise. For example, when you book event tickets, you might see a “service fee” added at checkout, making the final price much higher than expected.
Shipping costs: Shipping fees can make an item that looks cheap much more expensive. Sellers often show low prices but add high delivery charges during checkout. For instance, you might see a great deal on a gadget, but the shipping fee turns out to be almost as much as the gadget itself.
Handling fees: Handling fees are extra charges for packing or special care when shipping an item. They usually show up if you request extras like gift wrapping or quick delivery. For example, if you’re buying fragile items like glassware, you might be charged a fee for safe packaging to avoid damage.
Payment processing fees: Some payment methods, like credit cards or digital wallets, come with extra fees. These are added at checkout and depend on the payment option you choose. For example, when booking a flight online, you might notice that paying with a credit card costs more than other payment methods.
Return fees: Returning items isn’t always free and can involve shipping or restocking fees. These fees are often taken out of your refund, so you get less money back than you expected. For example, clothing stores may charge you for return shipping unless they have a free return policy.
Automatic renewals: Automatic renewals are when a service or subscription charges you again without asking. These charges can surprise you if you forget to cancel on time. For instance, a magazine subscription or a trial for a streaming service might auto-renew and bill you even if you don’t plan to keep using it.
Tips to avoid hidden fees
Read the policies along with the terms and conditions: Take time to read the rules and terms before buying anything. This is where companies mention extra charges like return fees, shipping costs or auto-renewals. For example, check the "Returns and Refunds" or "Shipping" sections on shopping websites to know what to expect. Don’t skip this step - it can help you avoid surprises later.
Monitor card statements: Always check your card or bank statements to spot any extra charges. Sometimes, hidden fees like auto-renewals or service charges only show up after you’ve paid. For example, you might notice a charge for a subscription you forgot to cancel. Keeping an eye on your statements helps you catch these early and stop them.
Use virtual cards: Virtual cards are temporary cards you can use for specific payments. They let you set limits, so no one can charge more than you allow. For example, if you’re signing up for a free trial, using a virtual card ensures you won’t be charged when it ends. Banks or payment apps usually offer this feature.
Keep track of your subscriptions: Subscriptions often renew automatically, and you might forget about them. Use reminders to track renewal dates. Also, checking your account settings regularly can stop you from paying for services you don’t use.
Keep these points in mind when using cards to make payments
With smart practices like setting spending alerts, you can stay in control of your finances and avoid unnecessary charges. These notifications keep you informed about every transaction, helping you catch any hidden fees instantly.
Take charge of your spending today! Activate alerts and use your Kotak 811 Debit and Credit Cards confidently for a secure and seamless shopping experience. Stay proactive and make every swipe count!
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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