3 Fees High Earners Never Pay (but Everyone Else Does)
Among the many benefits of earning a high salary (beyond the extra piles of money) is that you don’t have to worry too much about paying fees that everyone else gets hit with.
Here’s a look at some common fees that high earners almost never pay, according to a financial expert.
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Bank Fees
Bank fees come in various forms, and usually involve monthly maintenance charges, ATM fees, overdraft fees and wire transfer fees.
The best way to avoid bank fees is to meet minimum balance requirements. You also should avoid spending more than you have in your accounts.
This is not a huge problem for high earners, for the simple reason that they keep more than enough money in their accounts to avoid fees, according to Chad Cummings, an attorney and certified public accountant (CPA) at Cummings & Cummings Law who previously worked in finance and tax
“My high-net-worth clients maintain accounts that waive wire fees, ATM fees and monthly maintenance charges because they meet minimum thresholds,” Cummings said. “This can add up to hundreds of dollars a month that can be avoided with balance planning.”
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Late Fees
When you pay a bill after its due date, you’ll probably get hit with a late fee. These fees apply to just about any recurring expense, whether it’s a mortgage or rental payment, utility bill, tax bill, or credit card payment.
The amount varies based on numerous factors, from your location and payment history to the type of bill and issuing company.
Late fees are a common problem because most people live on strict budgets with little margin for error. When consumers hit a rough patch financially, they’re forced to prioritize which bills to pay – and when. In some cases, they need to skip payments, which results in late fees.
High earners are much less susceptible to late fees. For one thing, they have plenty of money to pay all their bills on time. For another, most set up automatic payments that eliminate the risk of forgetting to pay bills.
Credit Card Interest
Not everyone can pay their credit card balances every month. In some cases, consumers run up their credit card balances to earn reward points but then can’t pay the full balance when the statement arrives. In other cases, they simply don’t have the money to pay the balance in full.
For high earners, this is rarely a problem. They have the financial wherewithal to pay off their credit card bills immediately, regardless of the balance.
“Credit card interest is the fee no [high earner] client of mine pays,” Cummings said. “They use cards for float and pay the statement balance. Using charge or debit cards instead of credit cards lets you avoid paying interest.”
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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