If you’ve flown in the past year or two, you know that the airlines have made flying an a la carte ordeal, charging fees for almost everything.    Checking bags, pillows, blankets, snacks are all things that now cost money on different airlines.  One airline is even making passengers chip in to pay for the crew.   Okay, I made that up, but it is true that one airline is going to start charging a fee to buy a ticket.    Hmmm… charging me for the privilege of buying something from you.  Yeah, I think I’ll pass on that.

In any event, a new feature in the booking engine at Trip Advisor is attempting to add some clarity to all these fees.   If you use their fees estimator, which is a button that shows up on the results page after you enter the basics about your flight (route, dates).   If you click the button, a pop up asks you what services you will need and will then adjust the ticket price on each airline to give you a better understanding of where the best bottom line value is.

For those looking to find the lowest overall price for their next trip (and who isn’t), this tool might be worth a look.

By the way, if you ever need to track a flight, try the MyRatePlan Flight Tracker.

Recommendations:

1. Get a 0% APR balance transfer credit card
2. Transfer high interest balances
3. Don’t use this new card for other purchases

Annual Savings Potential: Depends on balance– could be $1,000 or more

Discussion According to New York Newsday, credit card interest payments were $116 billion in 2007, with another $23 billion in fees.  If you have reasonably good credit, your contribution to this amount should be about $0.  We all tend to think about the cash or travel rewards associated with a card we are considering.  However, if you are currently carrying a balance on one or more cards, not paying interest for a year will likely be worth far more than any of those other benefits.   (Use our balance transfer calculator to see how much you can save).    Try and find a card without a balance transfer fee — unfortunately most of them do at the current time.

Beware this Catch: More importantly, it can be more expensive than you think if you use your new card to make purchases during the 0% balance transfer period.  Most cards have a disclosure that says something along the lines of “Payments will apply to lower interest rates first”.    Let’s say you get a new card with an interest rate of 10% on purchases, with 0% on balance transfers.  Further, let’s assume you transfer $1,000 from another card, then rack up $1,000 in additional spending your first month.   You then make a $200 payment with your first bill.    Guess what — your card company will apply your payment to your 0% balance, and you’ll end up paying interest on the full $1,000!    As you can see, this provision can significantly reduce the benefit of the 0% APR.

There are two solutions to this dilemma.      You can try and locate a card with 0% APR on both balance transfers and purchases.   Alternately, use your new card to transfer the balances, then stick the new card in a drawer and don’t use it for any additional purchases.

For those who qualify and who only need a cell phone for emergency situations, you may be able to get a cell  phone and monthly allowance of minutes for free.   A company called SafeLink Wireless is offering this in several states and it will soon expand to others.  (Check their website for availability in your location).

SafeLink (owned by the same people that market TracFone), is made possible by a government program (funded by the Universal Service Fees you see on most phone bills) that provides lower income households with discounts to make telecom service more affordable.

SafeLink’s website says the program provides a free cell phone and a number of free minutes each month, that varies by state.   We sampled a few Zip Codes, and usually found that they provide a little over an hour of free talk time each month.   It appears that if you stay within that allocation of minutes, there are no charges whatsoever.   For those wanting to talk more, TracFone airtime cards can be purchased and used.

UPDATE 10/27/09:  For those interested in this service, click the link for Safelink Wireless. That is the best place to see if you qualify and/or if this service is available where you live.

Let’s start with the bottom line here:    Don’t take out a loan or advance on the tax refund that you are expecting.   Period.  End of story.   If you want your money quickly, just file electronically and tell the IRS to direct deposit your refund to your bank account.  If you made $56,000 or less in 2008, you may qualify to file your federal taxes for free.  If you do direct deposit, and there aren’t any issues, you’ll have your refund in two weeks or less — it may take another week or so if the IRS mails your check.   After you file, you can check the status of your refund online.

So, if you take out a refund anticipation loan, you are borrowing against money you’ll see within about one to three weeks.   For that privilege, you’ll pay a very high cost.  We won’t go into the math here, because fees and rates vary wildly across preparers, but the effective APR (all the costs of the loan annualized for a full year) is often north of 100%. It may not seem like the cost is that high, because you only are actually borrowing for a couple weeks, but maybe this example will help:

Let’s say you get a $1,000 loan for two weeks and it costs you $50 in fees and interest.    If you were to put that money in a bank account earning 2% interest (a pretty good rate right now), you would earn about 77 cents.   So, basically, someone is charging you $50 for money that is costing them less than $1.00.

About 8.7 million people took out these loans in 2007.  Don’t be one of them in 2009.   For more information, read this release from the Consumer Federation of America & National Consumer Law Center.

Do you text message? If you do, and you aren’t on a text messaging plan with your carrier (or have free messaging as part of your rate plan), you are likely wasting money. This is the case even if you are sending or receiving just one text message a day. If you are sending & receiving just 4 messages a day, you could be overpaying to the tune of $200 per year.

MyRatePlan has just launched a new text plan calculator. Try it out… it only takes about 15 seconds and could save you a lot of money.

Recommendations:

1. Get a completely free credit report

Annual Savings Potential:  About $180 over a credit monitoring service, although they aren’t exactly the same thing

Discussion Once per year, as a result of a government agreement with the credit report industry, you are entitled to a free copy of your credit report (although not your credit score) from all three major credit bureaus.   This site serves as a central clearinghouse for that program, and there is no charge.    This is different than FreeCreditReport.com, whose commercials are papered all over television.  That service offers you a free credit report, including your credit score.  However, it comes with the requirement that you enroll in their credit monitoring program called Triple Advantage.   You have seven days to cancel, or you are billed $14.95/month.

Some may benefit from the ongoing monitoring of FreeCreditReport.com, but if you just need a one-time check of  your credit, the free site in the recommendation is just fine. Note also that if you are ever turned down for credit based on your credit report,  the Fair Credit Reporting Act specifies that you must be alerted to that fact and will have an opportunity to see the credit report relied on to turn you down.

Recommendations:

1. Check your break-even point on a refinance
2. Refinance (if it makes sense) while rates are low

Annual Savings Potential: Can be thousands of dollars/year

Discussion   Mortgage rates are at levels that haven’t been seen in 40 years or more.  The weak economy, coupled with government efforts to push rates down to make housing more attractive, is making this a once-in-a-generation opportunity for those with good credit to refinance.    The first thing to look at, of course, is whether current mortgage rates are lower than what you are currently paying.  If not, then there’s nothing to see here (unless you are on a variable rate that may spike up in the not-too-distant future).

For most people, current rates provide an opportunity to save tens of thousands in interest over the life of a mortgage.   However, because there are front-loaded costs associated with most mortgage financing, it isn’t as simple as comparing rate A to rate B.   At a high level, here are the two approaches you can take:

• If you plan on staying in the home for many years, look for the lowest interest rate option offered by your bank.  You may have several options, with lower rates coming with more origination costs (points).   You’ll pay more today, and your break-even period will be longer but you’ll end up paying the least interest in the long run
• If you don’t know how long you’ll stay in the home, or want to minimize out-of-pocket costs at closing, shop for the lowest rate that includes 0% origination fee.   In this scenario, your break-even is sooner, although your monthly payment will be a bit higher and, if you end up in the home for a long time, you’ll pay more interest.

Another suggestion to minimize out-of-pocket costs at closing is to have them rolled into the loan.   This will increase the principal balance (amount you are borrowing), slightly increasing your monthly payments.

Recommendations:

1. If you are using cable modem, consider DSL or even dial-up
2. Find free Wi-Fi

Annual Savings Potential: $240 (cable to DSL), more for dial-up or Wi-Fi

Discussion   Unlike most cable service, most phone companies price DSL based on speed.   If you are using the Internet primarily for things like email or reading web pages (as opposed to downloading large files), a lower-speed DSL (still about 10x or more dial-up) can be had for $20 or month in some areas, about 1/2 the price of cable modem service.   If your needs are even less, most dial-up is now less than $10/month.   After almost completely disappearing, we’re seeing more interest in dial-up in recent months.   Want to spend even less — like $0?   Many coffee shops and the like offer free Wi-Fi (although you might need to make a purchase), as do many public libraries.  If you completely give up your Internet service, you’ll probably want to have a free web-based email (e.g., gmail or hotmail) if you don’t already have one.

Recommendations:

1. Do an insurance check-up at least once a year:   Auto, Health, Life, Home
2. Do it online

Annual Savings Potential:   Hundreds of dollars

Discussion  An annual check of your insurance coverage is important for several reasons.   You may be paying too much for the insurance coverage you have, or you may have too much (or too little) coverage for your current needs.    Do an online comparison — not only will you often get multiple quotes, your information can be saved to make it that much easier to check later on that you are getting the most for your money.   Since most insurance is regulated by state, you will get the same quote for a particular company whether you get the quote online or through a more traditional storefront agent.

This is the first of a series.   There’s no shortage of advice out there telling us how to save money.  However, much of it is along the lines of “give up your latte” or “don’t go out to eat”.  Great, I’m already depressed enough about the economy and now they want me to drink nasty coffee.

We decided to come up with a different list.  Ways to save money without having to change your lifestyle.   These are better ways to spend your money or equivalent products that are cheaper.   The goal:    To have the things you have today, only to spend less to have them.

Rental Cars:    Use the ‘opaque pricing’ option on Priceline or Hotwire.

Yes, you can use these services for airfare and hotels and you can save plenty of money that way as well.   However, there is one big difference with cars that fits with our theme for this series.    When you book airfare or hotels through these sites, you give up some control.   For example, you may have to fly at an inconvenient time or change planes.  Or, a hotel might be in a different part of the city than you want.   You won’t know the specifics until after you make a non-refundable commitment.   However, those risks are minimal with rental cars.   Whether you get assigned to Budget or Avis, Hertz or some other major provider, you’ll be picking your car up in roughly the same place and the class of car you pick (e.g., compact) will get you essentially the same car from one provider to another.    So, unlike airfare or hotel, there really is no trade-off when using Priceline or Hotwire —-  just savings of 10-30% or more.