What Are Junk Fees? How To Avoid Unexpected Charges In Your Finances

Ever buy a concert ticket that was advertised as $45 dollars only to end up paying $75 at the end because of “convenience” fees and other charges? You were likely hit with what’s often called a “junk fee.” 

Here, we’ll go over the definition of junk fees, the best ways to avoid paying such extra charges and what lawmakers are doing to curb these fees.

What are junk fees?

Junk fees are hidden, surprise charges added on to the initial, advertised price of goods and services. These fees can cover up the actual cost of a product or service and can be seen as unfair or deceptive. 

In banking, charges such as account maintenance fees, ATM fees or overdraft fees are commonly referred to as junk fees. 

Examples of common junk fees

The Consumer Financial Protection Bureau (CFPB) has listed examples of junk fees. These include:

• Overdraft fees
• Service charges imposed by ticket sellers
• Resort fees charged by hotels
• Mortgage closing costs
• Student loan servicing fees
• Credit card late fees
• Convenience fees for making payments online or over the phone 

How to avoid junk fees

The previous administration, and the current one, are taking some steps to try and curb these fees. In December 2024, under the Biden administration, the Federal Trade Commission announced a Junk Fees Rule cracking down on companies who use deceptive pricing and other methods used to hide the total price of a good or service. Then, on March 31, President Trump signed an executive order targeting ticket fees and scalpers.

The FTC’s Junk Fees Rule is due to take effect May 12, 2025. And some companies have already started to make prices transparent. Ticketmaster and Live Nation, for example, now display what they call “All-In Pricing.” This allows customers to see the cost of a ticket and fees as soon as they begin shopping, not just at the end of a transaction. 

Even though companies are making changes to the way fees are displayed, you should still make sure you understand what you’re buying. Read the fine print and shop around for companies that don’t charge junk fees. In some cases, certain fees might be avoided by negotiating with service providers while others may simply be unavoidable.

Here are a few of the most common junk fees as well as steps you can take to avoid them (or at least know about them). 

Bank account monthly service fees

What they are: Also known as maintenance fees, monthly service fees are debited from your account once every statement cycle. Among checking accounts that don’t bear interest, the average monthly service fee is $5.47, according to Bankrate’s 2024 checking and ATM fee study.

How to avoid monthly service fees: You can find a bank that doesn’t charge such fees, which is often the case with online banks. Alternatively, find a bank that makes this fee easy to get waived. For instance, some banks allow you to avoid a monthly service checking on your checking account by receiving direct deposit every statement cycle or by using your debit card a set number of times per statement cycle. 

Overdraft fees

What they are: An overdraft fee is what banks often charge when they temporarily cover transactions that overdraw your account. The customer is responsible for paying the fee promptly and bringing the account back to a positive balance. Bankrate found that overdraft fees are on the rise. The average overdraft fee rose in 2024 to $27.08, up from $26.61 in 2023.

How to avoid overdraft fees: You can find a checking account that doesn’t charge overdraft fees. If your account does charge these fees, you can choose to opt out of the service, which results in transactions simply being denied that would have overdrawn the account. Alternatively, you can use overdraft protection, which triggers automatic transfers from a linked account if needed (although some banks charge for overdraft protection transfers).

ATM fees

What they are: Using an ATM outside your bank’s network could result in a fee from your bank as well as a surcharge from the ATM owner. The total combined fee for these charges averages $4.77, according to Bankrate’s 2024 checking and ATM fee study.

How to avoid ATM fees: You can keep from being hit with ATM fees by sticking with ATMs that are in your bank’s network. Otherwise, you can find a bank that doesn’t charge fees for using ATMs outside its network or reimburses some or all surcharges imposed by the out-of-network ATM owners.

Credit card late fees

What they are: Your credit card issuer may charge a late fee if you don’t make your payment by the due date. This late fee will likely be factored into your next billing statement. The amount charged for late fees can be found on your credit card agreement. 

How to avoid credit card late fees: You can set an alert on your phone to remind you to pay the bill before it’s due. Alternatively, you could create a monthly budget to help you factor in such bills and remember to pay them on time. Various credit card issuers offer some credit cards with no late fees, including Discover and Citi.

Mortgage closing costs

What they are: When you buy a house, closing costs will be assessed when you finalize the transaction. Such costs often include fees for home inspections, property appraisals and credit checks, as well as real estate agent fees and attorney fees. The average closing costs nationwide for buying a single-family home in 2021 were $6,905 including taxes and $3,860 without, according to data from ClosingCorp.

How to lower mortgage closing costs: While you likely won’t be able to avoid closing costs altogether when you buy a home, you can try to negotiate that some of them be lowered or paid by the home’s seller. You could also opt for a no-closing-cost mortgage, although this usually just means the lender will roll the fees into your principal balance (instead of your paying them up front) or charge you a higher interest rate on your loan.

Resort fees

What they are: When you book rooms at a hotel, the final price may be significantly higher than the amount that was advertised initially. In addition to taxes, you might find “resort fees” listed on your bill, which can include anything from bottled water and premium WiFi to discounted tour tickets and shuttle service.

How to avoid resort fees: It can be worth your while to shop around for a hotel that doesn’t charge resort fees. You should be able to find them included in the fine print or by calling the hotel to ask.

Concert and sporting event ticket fees

What they are: When you purchase tickets to attend a ball game or a concert, the total price may be increased due to factors like order processing charges, service fees or facility fees. Customers dealt with this issue for years with companies like Ticketmaster and Live Nation.

How to avoid ticket fees: At this time, you’ll likely be charged service fees from any ticket sales company. But some companies will at least show you the full cost of a ticket, including the fees, upfront, allowing you to budget better for your entertainment expenses.

The fight against junk fees

In December 2024, the Federal Trade Commission announced its Junk Fees Rule. This rule focused on wiping out deceptive pricing and stopping merchants from concealing the total price by hiding extra fees for event tickets and lodging.

“People deserve to know up front what they’re being asked to pay — without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said former FTC Chair Lina M. Khan in a statement. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.”

Furthermore, President Trump’s March executive order takes aim at excessive ticket fees and scalpers. One of the goals of the ruling is to “evaluate and, if appropriate, take enforcement action to prevent unfair, deceptive, and anti-competitive conduct in the secondary ticketing market,” according to a White House statement.

Despite these rules and executive orders and some progress being made in favor of the consumer — like Ticketmaster and Live Nation at least showing the junk fees upfront — there have been setbacks in the fight against junk fees, too. In April, the House of Representatives voted to repeal a new Consumer Financial Protection Bureau rule that would have limited excessive bank and credit union overdraft fees.

Bottom line

The push to eliminate junk fees is focused on regulations requiring upfront pricing. Some companies are taking steps to comply, but there are still challenges along the way. 

When it comes to junk fees often charged by banks, you can take steps now to avoid a lot of them. For example, many of the best high-yield savings accounts and the best checking accounts don’t charge service fees, ATM fees or overdraft fees. 

Until junk fees become illegal (if they ever do), as a consumer, your best method of avoiding junk fees is understanding them, reading the fine print and, wherever you can, shopping around for companies that don’t charge the fees.