"Money File"-Cost of Convenience
Wednesday, June 20, 2007SUSIE GHARIB: In the "money file" tonight, a look at the cost of convenience, where you save time but lose money. Here's Chuck Jaffe, senior columnist at Marketwatch.
CHUCK JAFFE, SENIOR COLUMNIST, MARKETWATCH: The guy at the next pump told me the other day that he had driven miles out of his way to come get the cheapest gas around, so he could save $0.16 per gallon. When he left, pulling out in front of me, he went right to the neighboring bank. Now his gas savings amounted to about three bucks on his station wagon. But if he simply picked the closest bank machine in a rush to get cash, he gave it all back, probably paying $1.50 to the host bank and another $1.50 to his bank for using a foreign teller machine.
Consumers lose hundreds of billions of dollars to these charges, all in the name of convenience every year. And while everyone hate higher gas prices, they don't seem to care about paying bank fees. That's the only way to explain a recent study from creditcards.com, which noted that people love the convenience of plastic, but hate the aftermath. The survey showed clearly that few consumers understand how their own behavior can be damaging. Hardly anyone reads their cardholder agreements, so they don't know the terms under which they're working.
Moreover, 90 percent of survey respondents said their credit debt was less than the average household's debt of roughly $9,300. Obviously, it's impossible for virtually everyone to be above average, so a lot of people are just fooling themselves. We all need to stop that and to be honest about our fee behavior. If you like saving a buck, then learn the rules and do it at the bank and not just at the pump or in the store. I'm Chuck Jaffe.
