President Biden looks to toss "junk fees", how to avoid them

President Biden called on Congress to crack down on "junk fees" in his State of the Union Address. But what exactly are junk fees? And what's being done about them?

Junk fees are considered those extra charges, not included in the price, you're asked to pay. They include things such as resort fees, service fees, early termination fees, and overdraft fees.

The fees just keep adding up. Like $30 for over-drafting your bank account to buy a $3 cup of coffee.

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"We have a payment system that has become a reverse Robin Hood. Low-income people who are living paycheck to paycheck, get hit with fees, minimum account fees, overdraft fees," said Aaron Klein, a senior fellow at The Brookings Institute.

In his State of the Union speech, President Biden called on Congress to pass the Junk Fee Prevention Act.

"Those hidden surcharges too many companies use to make you pay more," he said, referring to airline booking fees, service fees for buying tickets, resort fees, early termination fees from cell phone, TV, and internet providers, and high late payment fees.

"As fees add up, people may find their monthly budget busted and necessities like rent and utilities harder to afford," explained a video on the topic from the Consumer Financial Protection Bureau.

The Consumer Financial Protection Bureau is proposing limiting credit card late payment fees from as high as $41 to as low as $8.

Many banks already voluntarily eliminated or reduced their account overdraft charges, including Capital One, JPMorgan Chase, and Bank of America.

But some other banks argue customers can opt out of overdraft protection and that it provides a safety net to avoid missing payments. 

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Consumer advocates say the fees are hurting lower-income consumers the most.

"Run for the hills. Consumers need to look for banks that offer better deals because they're out there," Klein said.

Bankrate and Nerdwallet offer lists of some banks that offer no and low banking fees.  Bank fees can also usually be found on the institution's website.

Some banks also offer overdraft protection that draws from your savings account without fees.