How to Avoid Getting Ripped Off

There are some rip offs you can see coming a mile away. For example: anything from your hotel minibar. That bottle of vodka is about a dollar at the liquor store, but it's like ten bucks from the minibar. Some other rip offs, you don't see because they're hidden in the fine print and here they are in black and white.

You have homeowners insurance, car insurance, dental insurance and health insurance, but look on your cell phone bill. Cell phone insurance is one premium that you may be paying for that you likely don't need. Look on your bill. Are you paying for "handset protection"? How much does your phone cost? Do you really need it? If you keep your old phones, chances are the answer is no. Consumer Reports says if you don't have a smart phone or a lesser valued phone, you don't need cell phone insurance. Keep your old phones and in case your new phone gets lost, stolen or damaged. Just reactivate your old phone and you're golden. Is your credit card company charging you for "credit insurance" that promises to waive the minimum amount due in case you become disabled or unemployed? Financial experts call this "junk insurance" and recently, several big banks paid some hefty fines for what the Securities and Exchange Commission called "deceptive practices" for tacking on extra charges that the companies didn't tell the consumers about that they were forced to pay.

Speaking of credit cards, do you pay just the minimum amount due? It's a trap. Credit cards are great for the most part because when you're buying plane tickets or booking a hotel you need a credit card to hold your reservation, but the best way to use credit cards is to pay them off in full every month. Obviously we can't always do that, but if you pay only the minimum amount due, that interest is going make whatever you bought way more expensive than it should have been. If you have a ten thousand dollar balance on a card that charges 16 percent interest, your minimum amount due is the interest accrued plus one percent of the balance for a total payment of $233 plus change. If you only pay that, it's going to take you 14 years to crawl out from under. If you round up and pay $300 per month, you're going to be out from under in just four years.

Sometimes we come up a little short in the cash department and we think about taking out a payday loan. Well, don't. These places exist because we suck at math. You write them a check for $300. They give you $270 in return. Seems simple enough, but that $30 fee for a ten day loan translates into a 365 percent interest rate. It's really hard to save money, especially if you don't make a lot, but if you go to the payday loan place more than a couple of times in a year, you may want to sit down and take a look at your bills and work out a budget.