Beware of those hidden costs

By Martin Lewis, March 7, 2013
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It is the financial nightmares you never thought would happen that really hurt. Here is how to fight back against the top 10 hidden bill perils.

1. “My six-year-old spent £3,200 on an iPhone game”.
Letting youngsters sit with you while you use your smartphone or tablet means they are likely to know your password, and that can be expensive.
Recently, England rugby player Sam Vesty got smacked with a £3,200 bill after his six and eight-year-olds bought their virtual farm animals a virtual mountain of food, with real cash, at £70 a pop over three hours. It is disgusting that a kids’ game allows this, but it happens, so protect yourself.
If letting the kids use your tech, protect your password — your kids may know it without you knowing, so change regularly. Plus ensure your phone’s “in app purchases” setting is restricted, so it needs a password. Also speak to your network about financial and parental controls.
An alternative with iPhones is to delink your credit/debit card from your account and buy vouchers instead. Then it will never go over the top. Finally, if all goes wrong and you have been stung by a massive charge due to the kids, call up and explain. Often they will wipe it on a “one strike and you’re out” policy.

2. Avoid paying £150 a month for busting your overdraft.
Break your overdraft limit by even £1 and you can face charges of up to £5 a day or, at Clydesdale, up to £35 a transaction. Ensure you stay in the black.
If you have had charges and they have put you in financial hardship, you may still be able to reclaim. See www.moneysavingexpert.com/bankcharges.

3. Beware of online traps.
Shockingly, even sites like The Trainline and Ticketmaster have reportedly made an extra 30 pieces of silver by allowing membership clubs like Shopper Discounts to push these offers once you have bought stuff.
Many have been caught out, as MoneySavingExpert.com forum user Sweetie27 wrote: “Bought a train ticket and must have clicked a link, as for two years Shopper Discounts has been taking £10/mth from my account, now totalling £200. I did not know anything about this and am totally gutted.” Communications about these have marginally improved since then, but be very careful. My view is these aren’t worth signing up to.

4. Debit card charges when abroad.
Santander, NatWest, RBS, Halifax and Lloyds all add up to £1.50 every time you use them when spending overseas. Avoid. Instead, get a specialist overseas credit card — Halifax Clarity, Post Office, Saga (over 50s) and for Nationwide account holders only, its Select card. These have no spending charge, low ATM fees and crucially they don’t “load” the exchange rate, meaning near perfect rates worldwide. Yet the golden rule is to set up a direct debit to repay these cards in full each month to avoid interest. See www.moneysavingexpert.com/travelcards.

5. Watch TV online? Don’t pay the hidden £5 per film.
Web players now pump out programmes with image quality rivalling Sky and Virgin. Yet this hoovers up data, and many broadband packages have data limits. You can be charged £5 per 5GB (about two HD films) if you are over your limit. Consider an unlimited package, normally only a couple of quid a month more expensive.

6. “I got a £3,000 holiday mobile data bill.”
Many smartphone apps routinely check for updates and downloads in the background, and this can lead to monster fees abroad. Watching TV, videos or streaming music is worse.
Prices are not regulated outside Europe, so turn 3G off. One of my users got stung with a £3,000 bill on a trip to India and the USA.

7. Don’t “nearly” repay cards in full,
Repay credit cards in full and you usually don’t pay any interest. Yet if you owe £5,000 and repay £4,999, many cards will still charge you that month’s interest on the whole £5,000.

8. Beware of mobile voicemail
Voicemail is not always free. Many firms charge 35p a minute if you call it when you have used up your inclusive minutes (or from abroad). Keep track, or turn it off while on holiday.

9. Watch for pricey ‘go-to’ tariffs.
Once a fixed energy tariff ends, you slide onto providers’ uncompetitive standard tariffs — up to £260/year more than the cheapest. So diarise when it ends and switch again or join my www.moneysavingexpert.com/CheapEnergyClub, which does it for you.

10. Have debts where you bank or save? Beware.
If you have credit cards, loans or mortgages at the same bank where you save, beware. Banks can legally “set off” or use your cash to repay your debts without asking you. They tend to do it if you are struggling to repay. If you are at risk, the golden rule is to simply separate them, and use different financial institutions to save and to borrow.

    Last updated: 9:45am, March 7 2013