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Stop Overpaying for Everyday Items!

Consumers are overpaying for many everyday products and services, if users of BillShrink.com are any indication.

On "The Early Show," Peter Pham, CEO of the free money-saving service, showcased the products and services the site's more than one million users complain about most often.

He also offered tips on avoiding those excess costs.

Pham told CBS News, " We'd like to believe that the poor economy has been a tremendous education for the majority of us who got into the bad habit of living on borrowed money. People are getting smarter about keeping spending in check, and they are becoming more diligent about hanging onto their hard earned money. The real test will be to see if we can keep whittling away at this debt - we'll continue tracking and will keep you posted."

FIVE THINGS AMERICANS OVERPAY FOR

Non Bank ATM Fees

Each time you use an out-of-network ATM you pay an average of $3.43. Do that once a week and you'll rack up almost $180 in ATM fees every year. It has been estimated that Americans pay almost $4.4 billion in ATM fees each year. (Source: Bankrate).

PETER'S TIP

If you've ever had to get cash at an airport or at a sports stadium, you've paid a premium of $3-4 at an ATM because leaving to go find a cheaper option really isn't feasible. So if you aren't going to escape the convenience of using your nearest ATM, scout out a bank with a good ATM policy. Banks are competing for your business these days. Unfortunately they can't do much on the savings interest rates. Right now interest rates on savings accounts are anywhere from 1%-2% (Source: BillShrink). One tactic they are offering is re-imbursement on ATM fees. It's important when shopping around for a savings account, to find out the bank's ATM policies. Many don't charge a fee to use their own ATM, but they will compensate you if you use another bank's ATM as well. So if you are someone who goes to the ATM once a week, that could quickly add up and save you more money than you could potentially earn on that interest rate.

Credit Card Late Fees/Overdraft Fees

Paying late fees on credit cards and bills, and overdraft fees on bank accounts can be a disheartening use of one's hard-earned money. Especially when a minimum payment on a credit card of $15 is missed, resulting in a late fee that can be as high as $39 (and perhaps result in an APR increase). Overdraft fees add up, especially when they are made in quick succession, resulting in fees for each transaction made while an account is overdrawn. Luckily, as of last week there are new consumer protections thanks to the Credit CARD Act of 2009, that will prevent many arbitrary rate increases and other unfair practices. BillShrink's study of more than 150 credit cards over the past 13 months showed: One-third of issuers raised rates upwards of 20-30%, which ultimately cost Americans $12 billion (Source: BillShrink study January 2009-Feb 2010).

PETER'S TIPS:

Consider card with annual fee: Safeguard yourself now by staying on top of the ever-changing rates, rewards, and payment policies. Think about the total cost of owning that fee or non-fee credit card over time, interest rates do add up if you're not someone who pays off their bill each month. You can't judge a card by its fee: that $79 annual fee could save you thousands in interest rates if you happen to carry a large existing balance.

Limit the plastic in your wallet: Also, scale down the number of cards in your wallet. Consolidate your debt into one or two cards that you use on a regular basis to avoid an inactivity fees and be better able to keep track of payments, fees, and all the other complicated fine print. Also, keep an eye out for any "processing fees" tacked on your bill, which may be charges for paper statements, "customer service" fees, and more. While the CARD Act eliminated fees for paying your bill over the phone, it doesn't mean other "convenience" fees couldn't spring up in its place.

Car Maintenance from the Dealership

Unless a car is under warranty, going to a dealership for a repair is one sure way to overspend. Car dealerships often promise that certain work can only be done by authorized dealerships, and are less-inclined to negotiate prices, something that should be done with any type of auto maintenance. The average American spends up to $9,461 a year to maintain a car (Source: AAA; this includes average fuel, routine maintenance, tires, insurance, license and registration, loan finance charges and depreciation costs) You could shave off a few hundred dollars simply by negotiating with a local garage where there can be a difference of 5% - 10% or more in the cost of repairs between competing facilities.

PETER'S TIPS:

Go local: People end up overpaying on things like car repairs because taking your car to several garages for bids is a hassle. As a rule, independent repair shops are less expensive than new car dealers, they are usually small family-owned businesses where you may even talk face-to-face with the technician who works on your car. Prices tend to be more negotiable than new car dealerships because of less overheadFranchised repair facilities such as muffler shops (e.g. Midas, Goodyear, PepBoys, etc.) are also very competitive with their pricing.

Yelp it: Since car repairs can be so costly, some good advice is to read the Yelp reviews of your local garages. You'll find that people tend to be pretty vocal when feel they've been cheated on the price. This doesn't substitute for getting competitive bids, but helps guide you toward garages where people have been happy with the service.

Community Colleges: If you're really looking to save, check out the community colleges in your area to see if they have an automotive technical program that accepts vehicles for repairs. You still pay for any parts you vehicle needs, but usually there is no charge for labor. All the work is overseen by a qualified automotive instructor.

Pseudo Health Products

Whether it's the latest vitamin supplement, or the "protein bars" that are presented as "low fat" or "all natural," beware of getting trapped into fad health foods. Some of the latest crazes end up just as unhealthy as candy bars (the sugar!), while costing up to five times as much (up to $3.50/bar). In fact nearly half of US adults use form of a dietary supplement and they spend about $23 billion dollars a year on these supplements (Source: The New York Times).

PETER'S TIP: My wife has forced me to become more health-conscious; it was our top New Year's resolution this year, in addition to being more creative about budgeting. So one of the things we do at home is make our own healthy snacks the night before. With two young kids, it's even easier to take 10 minutes to prepare the snacks at home rather than run to the store to pick up a snack bar. We opt for snacks like combining cut veggies and low fat cheese, or cut apples and Greek yogurt to keep energy high and still get the protein you'd normally be looking for in a health bar. We always know exactly what we're eating and we're saving money.

Cell Phone Plans

Eighty percent of Americans overpay on their wireless plans. On average, BillShrink finds that people overspend about $300 on a standard two-year contract. However, we've found that a number of people overspend by a lot more - for example, residents in the states of California, Florida, Nevada and New York overpay in the range of $480-$600 during their contract lifetimes. The biggest reason - people don't really know how many voice minutes, texts and data they actually use. If more people "right-sized" their plans to meet their actual needs, or if more friends/colleagues/neighbors/family members signed up for family plans, they could save hundreds of dollars a year.

Speaking of which, the trend toward getting "family plans" continues to grow as people pool together their minutes, text and data needs among family members, roommates, co-workers, friends and neighbors. At BillShrink, we've seen a 2x increase in the number of queries about best family plans over the last six months.

PETER'S TIP:

Set aside 15 minutes to comb through your cell phone bill, or use Billshrink to do all the homework for you for free.

Family plan: If you aren't on a family plan, seriously consider combining plans with your wife, kids, parents and even trusted friends/neighbors (just remember they will have access to who you are calling so make sure these are trusted pals). You'll find the biggest immediate savings by switching to a family plan.

Your network: Also take a look at who you call the most. Since 65% of an individual's calls are typically to the same five numbers, take a look to see if your friends, family and co-workers are with one carrier. If so, consider switching to take advantage of in-network friends and family plans like Verizon's Friends & Family or AT&T's A-List.

Skip the new phone: We covet the newest gadget, but all the carriers offer free phones with a 2-year plan and today's devices are feature packed so consider a free phone to avoid additional hardware costs.

Eliminate services you don't use. Do you really need a $3 per month emergency roadside assistance plan that you never even requested? A quick call to your carrier can get this and other unnecessary charges removed.
Directory Assistance. You're not still calling 411 are you? Carriers can charge $1.25 or more for every 411 call. Try using a service like 1-800-GOOG-411 or (800) FREE-411 for free directory assistance.