This Week In Your Wallet: Fighting Back Against Resort Fees

This Week In Your Wallet:
Fighting Back Against Resort Fees

It only seems fitting that I start this week’s edition with what’s on the hearts and minds of countless people around the world…and that’s the devastating situation happening in Israel and Gaza. For those who have family or friends in the region, or ties to Israel or Palestine, my heart is with you. Additionally, if you’re looking for a way to support the humanitarian efforts in Israel and Gaza, NPR has put together a list of groups providing aid.

And now, on to our roundup of financial news…

A Benefits Bump For Those On Social Security…But Is It Enough?

If you’re a senior citizen on social security, you might have had October 12th marked on your calendar. On that date, the Social Security Administration used government data to calculate its COLA–or cost of living adjustment–for the coming year. While recipients will see a 3.2% increase in 2024 (equating to about $55 per-check) it’s relatively small due to inflation evening out. “Although inflation remains about double the Federal Reserve’s 2% target, it remains mostly lower, which means Social Security recipients will see a lower COLA,” reports Medora Lee for USA Today.

The hike is a sliver of what recipients got last year when the COLA rose by 8.7%--the largest increase in decades. As Lee writes, even though the COLA for 2024 is higher than the 20 year average of 2.6%, it has many senior citizens concerned about making ends meet. As evidence of this, in its reporting, USA Today points to a retirement survey by The Senior Citizens League, a non-profit advocacy group. According to the survey, 56 percent of respondents worry their retirement income won’t be enough to cover the essentials. And, 6 out of 10 seniors polled said Social Security benefit cuts are an even bigger concern.

So, what can be done to help seniors? “Congress could pass legislation to allow income tax thresholds for taxing Social Security to be adjusted annually for inflation, the same way the IRS adjusts tax brackets,” says Lee. They also could change the way the COLA is calculated, using instead the government’s consumer price index for the elderly. “If that was the law today, the COLA in 2024 would be higher – about 4.2%,” Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League tells USA Today.

Why “Set It And Forget It” Isn’t The Best Credit Card Payment Strategy

Set it and forget it. That’s the mantra used by many people to manage their credit card payments. You log in, set up auto-pay and you’re done. You’ll surely save money by avoiding late fees…right? Wrong, says Imani Moise of the Wall Street Journal. “In theory, higher autopay enrollment should lead to reduced credit card fees since customers who sign up for automated payments are less likely to forget to pay and thus can avoid late fees and interest charges,” writes Moise. “Yet the total fees and interest paid by cardholders rose 19% to around $240 billion from 2015 to 2020, according to federal data.”

When you set up autopay for your credit card bills, you’re given three options–paying in full, paying a set amount or paying the minimum. According to a study by the National Bureau of Economic Research, for many, paying in full every month is unsustainable and those choosing that option are likely to change their setting within the first 10 months. Those who opt for the minimum payment tend to keep things as is…and that’s where the problem lies. “Smaller payments then lead to paying more in interest, which might offset the benefit of avoiding late fees, especially as interest rates rise,” says Jialan Wang, an associate professor of finance at the University of Illinois Urbana-Champaign and a former economist for the Consumer Financial Protection Bureau, who Moise spoke with for her reporting.

Paying your balance in full is the only way to avoid interest when you’re using autopay. For many though, that’s just not realistic, and can lead to overdraft fees. To avoid this, you can schedule your payments for the days you get paid instead of the dates set by the credit card company. “There is also value in paying your bill the old-school way, manually, according to financial advisers,” writes Moise. “Actively managing your account helps you stay on top of your spending and spot any fraudulent charges.”

Fighting Back Against Resort Fees

It’s a scenario most of us have probably been in. You’re searching for a hotel and find a great rate. You select your room type…punch in your guest information…credit card details…and review everything before paying…only to find the price of your room has increased. Why you might ask? Those pesky money grabs known as “resort fees.” Hotels justify them by saying they cover the cost of things like WiFi, the fitness center, water bottles, parking and other amenities. In other words, they’re things that used to be included in your room rate.

For years now, travelers have griped about resort fees. Now, there’s a renewed push at the federal level to crack down on them. As Elaine Glusac reports for the New York Times, the “Hotel Fees Transparency Act” aims to require all hotels and short-term rentals to show the total price for a stay up front, fees included. President Biden recently announced a proposed Federal Trade Commission rule to ban any hidden “junk fees,” including those tacked on to hotel room prices. On the state level, attorneys general are tackling the issue, with several suing hotel chains. “Marriott, for example, has settled cases in Pennsylvania and Texas, agreeing to include resort fees in prices displayed on websites,” writes Glusac. In California recently, legislation was signed to ban junk fees, beginning in July of 2024.

As we wait to see how the federal proposals shake out, there are things travelers can do to avoid paying resort fees. Lauren Wolfe, who spoke to the Times for their report, knows a thing or two about that. She’s the chief legal officer for Travelers United, a consumer advocacy group and the founder of Kill Resort Fees, a site she created after being forced to pay a $20 resort fee in Key West, Florida. “I say, ‘Ask nicely twice,’ but people answering the phone at the front desk aren’t those who set the policy,” Wolfe tells the Times. If you are forced to pay a fee that wasn’t disclosed, Wolfe suggests disputing the charge with your credit card company or reaching out to your state’s attorney general. To avoid the fee altogether, you can also search for lodging at the website ResortFeeChecker.com.

Need To Return A Package? There’s An App For That.

Just in time for the holiday shopping season, Uber has announced a new service. As Kiplinger reports, for a fee, the ridesharing company will now return your packages. The new feature will run you $5 (unless you’re an Uber One member–in that case, it’s $3) to have up to five packages returned to the local post office, UPS or FedEx. “Consumers will be able to track their packages in real-time using the Uber app and the courier will send visual confirmation or a photo of the receipt when the drop-off is completed,” Joey Solitro writes for Kiplinger.

There are some restrictions to be aware of. First, the package needs to have a value under $100 and weigh less than 30 pounds. It also needs to be sealed in prepaid packaging, with a label or QR code. Uber prohibits packages that include alcohol, highly perishable foods, gift cards and fragile items, among other restrictions. It’s also only available in certain cities.

While online shopping has made things more convenient, returning items purchased via the web has become a tedious task on many consumers’ to-do lists. “A 2022 survey of 2,002 U.S. consumers by the National Retail Federation conducted in partnership with research firm TRC revealed that 79% of shoppers under the age of 30 think mail returns are somewhat or very annoying — Uber’s new feature is its solution to this problem,” adds Solitro. I often say “time is money,” so if $5 can save you an hour of driving to the post office and standing in line to make a return…it just might be worth it.

Have a great week!

Jean

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