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Save up to Rs 12,000 a year

Money Today has done some calculations to discover that, on an average, an urban Indian family could be shelling out close to Rs 12,000 a year as fees.

Kamya Jaiswal | Print Edition: March 5, 2009

They were always a pesky lot. But till about a year ago, you were willing to close your eyes and pretend that the vile creatures called fees didn't exist in your bills. That was the time of scorching salaries and returns on investments. Now, income sources have become clogged-and those diminutive fees suddenly seem too brawny to fit into your budget.

Actually, they were never insignificant. Money Today did some calculations to discover that, on an average, an urban Indian family could be shelling out close to Rs 12,000 a year as fees. If this has got your goat, it is because like many others you too failed to do the math.

The biggest penny filchers are services. If you do not maintain the minimum quarterly balance in your bank account, the average penalty is Rs 750. A change in the itinerary of one getaway can cost you as much as Rs 1,050-Rs 300 charged by the travel portal and about Rs 750 by the airline for rescheduling your flight. The people who use their credit cards to withdraw cash may be doling out fees to the tune of Rs 3,000 a year.

But this web of fees is not really an evil trap if you are an aware consumer. Nimisha Jain, a principal at the Boston Consulting Group, explains: "Breaking up the total cost into various components, including fees, allows the customers to pay only for what they really want and use." This means more choice and greater leeway for negotiation.

The only condition is that the fees should be transparent. According to Jain, companies have realised that levying sneaky fees is detrimental to their interests in the long run.

So if you want to save a neat bundle, it's time to scrutinise those bills carefully. (Use a magnifying glass as companies get away with printing extra charges in an extra small font.) You will then discover that the devil is really in the details.

Upfront, but high

Banks ruthlessly penalise laziness and carelessness. A senior RBI official ratifies that they have been given pretty much a free hand to do so. There is one condition though-banks must declare all the charges. Check out your bank's Website for the entire list.

Possible annual savings: Rs 1,720

Rs 100: A duplicate bank statement
Rs 750: Not maintaining the minimum quarterlybank balance
Rs 300: Cash deposit in a cheque drop box
Rs 75: Cash transaction at a non-base bank branch
Rs 20: Using the ATM of another bank
Rs 20: Bouncing of an EMI cheque
Rs 50: Re-issuance of Net banking ID and password

Ignorance charge

The Supreme Court's stay on the decision of the National Consumer Disputes Redressal Commission- to cap the interest rate charged on the late payment of credit card bills-conveys a strong message to plastic addicts: use the card responsibly or pay up. If you go by the book, credit cards are not really the fee suckers that they are made out to be.

Possible annual savings: Rs 999

Rs 112*:  A duplicate credit card
Rs 337*:  Withdrawing cash with a credit card
3.5%:  Of the amount spent abroad using a credit card(plus service tax)
Rs 100 : Paying credit card bills in cash
Rs 350: Late payment of credit card bill
Rs 100: Charge-slip request
—*Including service tax at 12.36%; figures are rounded off

In the name of frills

All discounts and special schemes for air travel are on base fares only. Also, if you are a finicky traveller, the add-ons can cost a bomb. So, this summer, make your holiday special by keeping the trip simple and saving more. Maybe you can fit another vacation in your budget.

Possible annual savings: Rs 1,740

Rs 100: Seat preference in an airplane
Rs 300: Change in itinerary for a booking made through a travel portal
Rs 20: Booking railway tickets online
Rs 80: Every kilogram of extra baggage on a plane
Rs 150: Returning a hired cab late by one hour
Rs 800: Extra chauffeur in a hired cab

Premium payment

Hotels expect you to pay for the exclusivity that they offer. Subash V., a 25-year-old assistant manager, realised this when he ran up a phone bill of Rs 15,000 in just two days at the Shangri-La hotel in Delhi. "The supply of hotel rooms across most Indian cities is lower than the demand. So the hotels will continue to charge higher rates when the markets rebound," says Shamsher Mann, a senior associate at the HVS Hospitality Services. But he affirms that most Indian hotels are upfront about their charges. So it's entirely your choice: pamper yourself or your wallet.

Possible annual savings: Rs 7,030

Rs 150: A one-minute STD call
Rs 13: A one-minute local call
Rs 300: One hour of Wi-Fi connection
Rs 100: A cola from the mini-bar
Rs 500: Airport transfer (one way)
Rs 1,500: Checking out late (half day’s room tariff)
Rs 3,000: Cancelling bookings within 48 hours(one day’s room tariff)

Download costs

With 3G set to enter the Indian bandwidth, the number of value-added services (VAS) will rise, and so will your mobile bill. The only way to cut costs is to use your phone for calls and SMSes only. However, Romal Shetty, national head of the communication sector, KPMG India, has good news. "Most telecom operators are targeting 20% of the total revenue from VAS. This will happen only when the content and user interface improve. As the volume of users expands, the cost of such services should drop," he says.

Possible annual savings: Rs 970

Rs 30: Subscribing to caller tunes
Rs 10: Downloading a wallpaper
Rs 100: Paying bills after due date
Rs 50: Buying a mobile game
Rs 700: Virus protection along with broadband connection

Unavoidable pain

There are some charges that you must bear with a grin. For instance, the fuel surcharge tacked on to air fares. Now, passengers departing from the Delhi airport must pay Rs 200 as airport development fee. Stock investors must also necessarily pay about 0.05-0.5%of the transaction value as brokerage fee. Add another Rs 400 as annual charges for a demat account. Hospitals have also begun levying a multitude of extra charges. Dr K.K. Aggarwal, former president of the Delhi Medical Association, admits that many hospitals ask patients to pay 30% more than the listed price of medical gadgets used for treatment, as service charges. It will only get worse. Soon, you may have to cough up about Rs 100 for more than one visitor per patient and another Rs 100 for parking on the hospital premises.

—All fees are averages and will vary across companies. We have assumed 4 cash transactions from a non-base branch, 10 cash withdrawals from the ATM of another bank, 8 online bookings of train tickets, a 2-hour delay in returning a hired cab, a 10-minute STD call and local calls from a hotel, and purchase of 4 wallpapers and 2 mobile games in a year.

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