Recently I learned about a phenomenon called stealth inflation. It’s a type of inflation that happens when businesses add fees to their products and services to help maintain their profit margins. Resort fees at hotels and service fees on food delivery orders are two examples of stealth inflation.
It’s estimated that Americans pay $65 billion in fees every year. So learning how to spot and avoid stealth inflation can help you save a lot of money. Here are some of the strategies I use to prevent stealth inflation from hurting my wallet as much as possible.
Be Willing To Walk Away If There Are Unnecessary Fees
Stealth inflation can be hard to avoid because fees are often hidden in the backend of a transaction. You may not see the $3 service charge for your food delivery order until you’re already on the checkout page with your credit card out.
Because you’re hungry and excited about your order, you may decide to go ahead with the purchase, even though the total cost is more than you expected. Businesses know that consumers are less likely to cancel the transaction in its final stages, which is why they often wait to display fees until the checkout page.
That’s why my top tip for avoiding stealth inflation is to be willing to walk away if there are lots of hidden fees at checkout. Instead of going along with the service fees that add $15 to your food delivery order, go and pick up the takeout yourself. As another example, don’t stay at a hotel that’s trying to charge customers a $30 per night resort fee. Whenever possible, try to find an alternative so you don’t have to pay junk fees.
Unfortunately, sometimes you may have no choice but to pay an unnecessary fee. I had to live with booking fees when I purchased my Eras Tour concert ticket. However, you don’t have to pay the airline fee for booking your flight over the phone if you’re capable of making your own reservation online. If we as consumers push back against these fees and refuse to pay them, companies may get the message and adopt more transparent pricing strategies.
Do Your Research
Because stealth inflation can be so hard to spot, it’s important to do your research and familiarize yourself with the hidden fees you may be charged. Certain industries have a greater tendency to hit consumers with fees, such as food delivery services, airlines, hotels, banks, credit card providers, telecom companies, and event ticketing platforms. So it pays to be extra vigilant when making these types of purchases.
Keep in mind that each industry has its own pricing quirks. At hotels, you have to be on the lookout for resort fees and parking fees. Airlines may charge a seat selection fee if you want to choose where to sit or a booking fee for reserving your ticket over the phone. Familiarizing yourself with the common fees in each industry can help you avoid them and save a bundle.
Right now I’m planning a trip to Detroit and just booked my hotel. Because I know that hotels sometimes charge resort and parking fees, I was able to call around before I made my reservation and inquire about these fees. Luckily I found a hotel in my price range without these added charges, so I shouldn’t be surprised by any hidden fees when I check-in.
If you don’t want to call a company directly to inquire about their fees, you can also find information about hidden charges online. Nerdwallet has lots of helpful articles about avoiding various charges such as ATM fees, bank account maintenance charges, airline fees, and more.
Always Read the Fine Print
My final tip is to always read the fine print. New hidden fees are popping up all the time, even in industries that never used to have them. Many restaurants have started adding service or inflation fees to the bill to cover their overhead without raising menu prices. These fees are often advertised in small lettering at the bottom of menus or on signage placed on tables, which is easy to overlook.
That’s why it’s important to be observant when you’re making purchasing decisions. Before you sign a phone contract, make sure you read the whole thing. Pay close attention to the pricing and terms when you take out a new credit card so you don’t miss important info about the APR or annual fee. Don’t rely on servers to tell you about service charges at restaurants. If you’re proactive about researching and avoiding fees, you’ll be able to save money and stick to your budget despite stealth inflation.
What do you think about stealth inflation? Have you noticed more stealth inflation recently? Share your thoughts in the comments!
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.