MONEY Banking

Get Paid Before Payday Without Any Fees, New App Promises

ActiveHours app screenshot

A payday loan alternative called Activehours promises employees that they can get paid immediately for the hours they've worked, without having to wait for a paycheck—and with no fees.

Payday lenders are often compared to loansharking operations. Critics say such lenders prey on people so desperately in need of quick cash that they unwittingly sign up for loans that wind up costing them absurdly high interest rates. According to Pew Charitable Trusts research from 2012, the typical payday loan borrower takes out eight short-term loans annually, with an average loan amount of $375 each, and over the course of a year pays $520 in interest.

These short-term loans are marketed as a means to hold one over until payday, but what happens too often is that the borrower is unable to pay back the loan in full when a paycheck arrives. The borrower then rolls over the original payday loan into a new one, complete with new fees, and each subsequent loan is even more difficult to pay off.

You can see how quickly and easily the debt can snowball. And you can see why payday loans are demonized—and mocked, as John Oliver just did hilariously on “Last Week Tonight”:

You can also see why many people would be interested in an alternative that isn’t as much of a rip-off. Payday loan alternatives have popped up occasionally, with better terms than the typical check-cashing operation. Now, Activehours, a startup in Palo Alto that just received $4.1 million in seed funding, is taking quite a different approach: Instead of offering a short-term loan, the app allows hourly employees to get paid right away for the hours they’ve already worked, regardless of the usual paycheck cycle.

What’s more (and this is what really seems like the crazy part), Activehours charges no fees whatsoever. In lieu of fees, Activehours asks users to give a 100% voluntary tip of some sort as thanks for the service.

There may be more than one reason you’re now thinking, “Huh?” On its FAQ page, Activehours explains that the service is available to anyone who gets paid hourly via direct deposit at a bank and keeps track of hours with an online timesheet. Once you’re signed up, you can elect to get paid for some or all of the hours you’ve worked (minus taxes and deductions) as soon as you’ve worked them. In other words, if you want to get paid for the hours you worked on, say, Monday, there’s no need to wait for your paycheck on Friday. As soon as your Monday workday is over, you can log in to Activehours, request payment, and you’ll get paid electronically by the next morning. When official payday rolls around, Activehours withdraws the amount they’re fronted from the user’s account.

As for voluntary tips instead of service or loan fees, Activehours claims the policy is based on something of a philosophical stance: “We don’t think people should be forced to pay for services they don’t love, so we ask you to pay what you think is fair based on your personal experience.” Activehours swears that the no-fee model is no gimmick. “Some people look at the model and think we’re crazy,” Activehours founder Ram Palaniappan told Wired, “but we tested it and found the model is sufficient to building a sustainable business.”

“People aren’t used to the model, so they think it’s too good to be true,” Palaniappan also said. “They’re judging us with a standard that’s completely terrible. What we’re doing is not too good to be true. It’s what we’ve been living with that’s too bad to be allowed.”

Yet Activehours’ curiously warm and neighborly, no-fee business model is actually one of reasons consumer advocates caution against using the service. “At first glance, this looks like a low-cost alternative to other emergency fixes such as payday loans,” Gail Cunningham of the National Foundation for Credit Counseling said via email in response to our inquiry about Activehours. “However, a person who is so grateful, so relieved to have the $100 runs the risk of becoming a big tipper, not realizing that their way of saying thanks just cost them a very high APR on an annualized basis. A $10 tip on a $100 loan for two weeks is 260% APR – ouch!”

Consumer watchdog groups also don’t endorse Activehours because it’s a bad idea for anyone to grow accustomed to relying on such a service, rather than traditional savings—and an emergency stash of cash to boot. Access your money early with the service, and you’re apt to be out of money when bills come due, Tom Feltner, director of financial services for the Consumer Federation of America, warned. “If there isn’t enough paycheck at the end of the week this week, then that may be a sign of longer-term financial imbalance,” he explained.

“Everyone thinks they’ll use the service ‘just this once,’ yet it becomes such an easy fix that they end up addicted to the easy money,” said Cunningham. “A much better answer is to probe to find the underlying financial problem and put a permanent solution in place. I would say that if a person has had to use non-traditional service more than three times in a 12-month period, it’s time to stop kicking the can down the road and meet with a financial counselor to resolve the cash-flow issue.”

The other aspect of Activehours that could be a deal breaker for some is the requirement of a bank account and direct deposit: Many of the workers who are most likely to find payday loans appealing are those without bank accounts.

Still, for those who are eligible and find themselves in a jam, Activehours could be a more sensible move once in a blue moon, at least when compared to feeling forced to turn to a high-fee payday loan outfit over and over.

MORE: I am unable to pay my debts. What can I do?

MORE: How can I make it easier to save?

MONEY Travel

Drink More Than 137 Beers, and a New Cruise Deal Is Totally Worth It

Draft beer glasses on rail of ship
iStock

Norwegian Cruise Lines just introduced an all-inclusive amenities package bound to get the attention of travelerswho love to eat and drink—and are tired of getting nickel-and-dimed.

Starting on August 4, Norwegian Cruise Line is offering a limited-time All-Inclusive package option for cruisers, in which one fee covers many of the extras not included in the basic cost of a cabin. The two biggies that are included are the Ultimate Beverage Package and the Ultimate Dining Package. They cover, respectively, nearly everything a passenger will drink and entrance to the ship’s specialty restaurants that normally cost extra. Also included are a host of other things passengers would otherwise have to pony up for: 20 photos taken by the on-board photography service, 250 minutes of Internet time, one bottle of wine, chocolate-covered strawberries, one bingo session, bottles of water throughout the cruise, a $100 or $200 credit for shore excursions, and gratuities for staffers.

How much does the package cost? The price depends on how long you’re cruising, but a seven-nighter is $899 per person, on top of the price of your stateroom. The option is being offered on a test basis now through August 29, for cruises lasting three to 14 days to nearly all destinations (not available on Pride of America sailings in Hawaii). If it proves to be a hit, we can expect the option to become permanent, and for it to inspire imitators from the competition.

The big question for cruise passengers is this: Is it worth it? Norwegian states that the package represents about $2,400 worth of value. (That’s per cabin, so for two people.) Travel Weekly, a publication aimed at travel agents, did its own math and concluded that a passenger paying a la carte for all of the included options would fork over $1,468 during the course of a seven-night cruise. In other words, you’d save $449 by going with the All-Inclusive package.

That’s quite a savings. But the customer only comes out on top if he or she actually wants the lion’s share of what’s included in the package. With the exception of gratuities—which are more or less mandatory—everything that’s included is totally optional. Essentially, you’re paying for bingo, bottled water, Internet time, photos, booze, and the rest even if you don’t partake of them. Travel Weekly pointed out that the commemorative photos included in the package, for instance, would run a fairly absurd $274. So if you wouldn’t pay for that in a million years, the deal might not be for you.

Let’s be honest: This package is going to appeal most to passengers who want to eat and drink to their heart’s content and not have to think about how much each and every beverage or meal is costing them. Some back-of-the-napkin math must be done, to see at what point the package makes sense for the individual.

That $899, for instance, would cover about 151 draft beers at $5.95 apiece, or 100 glasses of wine at $9 per. Subtract gratuities to the tune of $12 per day, or $84 for a seven-night cruise, and $815 is left—making the over-under 137 beers. Drink more than that, and you come out ahead. (You’ll also come away with one honey of a hangover, of course.) Add in seven meals at specialty restaurants at an average premium of $20 apiece, plus $29 for a bottle of wine, plus $100 for Internet time, and the math increasingly points in the package’s favor.

If nothing else, the offer should make it abundantly clear that the amount paid by cruise passengers above and beyond the cost of a cabin is often quite hefty. The big-ship cruise is billed as the ultimate no-hassle vacation. You pay for your room, and then you never have to touch your wallet while cruising. On virtually every mainstream cruise line, however, that’s not how things work. Regardless of whether or not you handle cash or swipe your credit card throughout the cruise, you are most definitely paying up for anything beyond the basics—alcoholic beverages, excursions, fancy coffees, restaurants that are nicer than the buffet, even soda. The expected gratuities are typically added automatically onto a customer’s bill.

Take a look at Norwegian’s specials and promotions and you’ll see several one-week cruises starting at well under $899, some for as little as $429. Those prices don’t include taxes and port charges—and they don’t include the extras mentioned above.

Does it make more sense to pay for it all upfront, via Norwegian’s new flat-price all-inclusive package? That depends a lot on whether you like the idea of handling nearly all of your vacation’s expenses in one fell swoop, rather than having every little purchase add up during the course of a cruise in nickel-and-dime fashion. It also depends a lot on how thirsty you typically are on vacation.

MONEY Banking

Stuck Paying Overdraft Fees? One Simple Rule to Not Be a Sucker

Hand holding large lollipop
Yulia M.—Getty Images/Flickr

A tiny portion of bank customers pays nearly three-quarters of all overdraft fees, to the tune of $380.40 annually per account—and some $31 billion total.

Before getting into the nitty-gritty of a new government report about overdraft fees, and before reviewing the recent history and some of the staggering statistics regarding these much-maligned bank fees, let’s cut to the chase and give some straightforward advice:

DON’T OPT IN to overdraft protection.

You may have done so after thinking that “protection” sounds like it’s good for you. Heck, you may have no idea that you’re actually signed up for such a service. (An overdraft, by the way, is when you pay for something with a check or debit card and don’t have enough money in your account to cover the tab, prompting a bank fee to kick in, likely in the neighborhood of $35. When you don’t have overdraft protection and don’t have a sufficient account balance to cover a purchase, your card will be declined, and there will be no fee assessed.) If you’re not sure, check with your bank to check your status. And whether you’ve opted in consciously or unwittingly, give serious thought to opting out. Like, now.

Okay, now that that’s out of the way, let’s run through how we got to where we are today, and why even as reforms have helped consumers save money, they come up way short compared to how consumers can help themselves.

The total amount and frequency of customers paying overdrafts have been declining. American customers collectively paid a whopping $37 billion in 2009 in overdrafts, one of the more outrageous factoids helping to bring about the creation of the CFPB (Consumer Financial Protection Bureau), as well as the Occupy Wall Street protests. After rules were put in place requiring bank customers to opt in to overdraft protection, rather than be signed up automatically for it, the total shrunk to $31.6 billion in 2011, and remains at around $31 billion annually.

On the one hand, consumers are paying $6 billion less in overdraft fees compared to five years ago. On the other, we’re still paying $31 BILLION each year on a fee that bank reforms were supposed to rein in. Why is the figure still so high?

A study released last week from the Consumer Financial Protection Bureau provides some answers. The vast majority of bank customers actually pay no overdraft fees whatsoever. Seven out of ten accounts incur zero overdrafts annually, and 82% of customer accounts are hit with three or fewer overdrafts per year.

Therefore, it’s a very small portion of customers who are paying the lion’s share of overdraft fees. According to the CFPB, 8.3% of bank customers overdraft more than 10 times annually, and they’re collectively responsible for a mind-boggling 73.7% of overdraft fees collected by banks. Who are these people, who pay on average $380.40 in overdraft fees? The data in the report reveals a profile of the prototypical frequent overdrafter:

They’re young and inexperienced. Nearly 11% of customers ages 18 to 25 have 10+ overdrafts annually, compared to less than 3% of those age 62+.

They make small, frequent purchases with debit cards. Consumers who use their debit cards more than 30 times per month were more likely to be frequent overdrafters, with 18% incurring 10+ overdrafts per year. And the purchases that sent them into a negative balance tended to be small, with a median amount of just $24.

They pay back the money soon. More than half of accounts are back in a positive balance within three days, and three-quarters are positive within a week of overdraft. This tells us that an overdraft is often a matter of sloppiness—absentmindedly paying for a small purchase without realizing the money wasn’t there to cover the bill, then quickly making a deposit or transferring money from another account to get out of a negative balance. By then, however, the customer has already been hit with a fee (one likely higher than the median $24 mentioned above), and paid back a loan that equates to an annual rate of 17,000%, as the CFPB put it.

They’ve opted in. Well, duh. A little over 14% of bank customers have opted in to overdraft protection, and unsurprisingly, they tend to get hit with more overdraft fees. (In unusual circumstances, overdraft fees can be assessed even if you haven’t opted in.) The average checking account that has opted in is hit with $21.61 in overdraft fees monthly, compared to $2.98 for those who haven’t opted in. What’s more, those who opt in tend to pay more in other kinds of bank fees too, including maintenance and ATM fees.

If the portrait above sounds like you, the obvious advice is that it’s high time to start paying more attention to where you bank, how you spend, and whether or not you’ve opted in to overdraft protection. If you have, OPT OUT.

MORE:

MONEY Advertising

Best ATM Ever Gives Away Free Trips to Disney, Flights to Caribbean

screenshot from TD advertisement

This viral "Automated Thanking Machine" video will warm your heart, despite the unlikelihood of any bank ever being this nice to you.

Visit the typical ATM and all you come away with is some of your own money, and perhaps a bitter taste in your mouth after coughing up a $3 fee.

Some very special ATMs set up by TD Canada, however, have been giving customers a whole lot more—like the opportunity to toss out the opening pitch in a Major League Baseball game, and a free trip to Disneyland for a single mom and her kids.

In this highly unusual case, the ATM acronym stands for “Automated Thanking Machine,” and TD Canada secretly recorded a bunch of customers on video while they’re receiving their very special gifts. It was edited and put into a YouTube ad that was posted last week and has generated more than 3 million page views.

It may seem like there are some privacy concerns. The bank bizarrely knows all sorts of intimate details about these customers’ private lives. For instance, it’s no coincidence that the guy who gets to throw out the opening pitch to Jose Bautista at a Toronto Blue Jays game just so happens to be a huge Blue Jays fan.

The robot-like voice emanating from the machine also gets into a deep conversation about how one elderly woman has a daughter in Trinidad who is stricken with cancer. Creepy, right? But when that voice announces that the bank is giving the woman a free flight to see her daughter, the heartwarming, tear-inducing scene that results apparently is enough to cast aside any qualms about invasion of privacy.

It turns out that the banks gathered information about these customers the old-fashioned way–with local staffers asking about their lives–rather than sneakily via reviewing Facebook accounts or scanning customer purchase histories. Most banks and companies use our personal information to try to sell us more stuff, but in this instance it was used to pick out the perfect, incredibly thoughtful gift. See for yourself.

MONEY Airlines

Airline ‘Transparency’ Law One Step Closer to Misleading Passengers

Boy holding paper airplane behind his back
John Lund/Sam Diephuis—Getty Images

A bill that would allow airlines to hide the true cost of flights (fees and all) was just passed by the House

Currently, airlines must include the full price of a flight—including federal taxes and fees—in advertisements. However, a new bill, which was approved by the House of Representatives on Monday, would allow the ads to exclude government fees, allowing for marketing that could fool consumers into thinking their flights will cost significantly less than they’ll actually end up paying.

As MONEY’s Brad Tuttle reported in April, $61 dollars of a typical $300 flight comes from federal taxes–20% of the overall ticket price. Under the new law, airlines could ignore that portion of the fare and advertise the same flight at $239. Could anyone actually buy that flight for $239? Of course not.

Regulations passed in 2012 outlawed this type of misdirection, but the airlines are now one step away from bringing it back.

The bill’s advocates argue that letting airlines advertise their unmodified prices would show consumers how much the government is adding to their travel bill. When the law was first proposed in the spring, supporters said it would “restore transparency to the advertising of U.S. airline ticket prices, and ensure that airfare ads are not forced to hide the costs of government from consumers.”

Knowing about government-added expenses is all well and good, but consumer advocates believe the law will do more to confuse flyers than educate them. The National Consumers League says the bill doesn’t provide transparency, and merely allows the airlines to advertise eye-grabbing but deceptive lower prices in order to win more business. In this way, the “Transparent Airlines Act” actually makes what consumers must pay for flights more opaque. That’s the opposite of transparency.

The Transparent Airlines Act still needs to pass the Senate before it becomes a law, and its opponents aren’t going to give up without a fight.

“Our organization, together with other consumer groups, will work closely with Senate staff to stop the passage of a companion bill,” said Charlie Leocha, Chairman of Travelers United, a consumer protection organization focused on travelers. “Even though the name of the bill contains the word ‘transparency,’ the effect of this legislation would be anything but.”

MONEY Banking

Why People Mistrust Financial Advisers

Untrustworthy businessman crossing fingers behind back
RubberBall Productions—Getty Images/Vetta

A financial planner says people can be cynical about her work. Her own experience as a bank customer helps explain why.

Very often, we financial planners convey the impression that getting your financial life into shape is easy. And that we’re in control of our finances.

If we had a bit of humility, we’d admit that we share the same frustrations as our clients.

Like dealing with low interest rates on checking accounts in combination with high banking fees.

“You get interest on this account,” the customer service representative from my bank said. This was about a month ago. I had called the bank upon receiving my monthly statement.

“Yes,” I replied. “I got a penny last month. A penny. And now you want to charge me $25 a month to have a checking account?”

She had to laugh.

I was calling to ask why a $25 charge had shown up on my formerly free checking account.

She asked if anything had changed. It had. I had paid off all my big debts. I was in much better financial shape.

Well, that explained it.

Now that I had repaid my loans to the bank, apparently my relationship with it wasn’t sufficient to earn me free checking. I was no longer paying the bank large amounts of interest, so it would start charging me this monthly fee. That is the way it works.

If this makes sense to you, you must be a banker.

Okay, that was a low blow. But for me, it’s an example of why so many clients have a bad attitude toward financial services institutions and professionals.

It’s not just the malcontents, it’s everyone. The surveys confirm that the public does not hold financial services institutions in high regard.

Many of my clients been burned before. And they’re probably still getting burned by such ridiculous tactics as fee-ing the customer to death or the inability to get a new mortgage or a small business loan without a dossier three feet thick that proves you do actually pay your bills.

I told the woman on the phone, “I just opened two checking accounts at another bank for my twin daughters. The other bank is going to charge $12 a month for each account. And as soon as my girls go show their college IDs, the accounts will be free. So tell me why I should pay you $25.”

I spoke politely, without a trace of anger.

Eventually, the customer service representative found a way to give me some credit for direct deposit of my paycheck. And she switched me to an account that will ding me only $7 a month.

Of course, if the bank had wanted to provide the best deal for a longtime customer, they could have recognized this direct deposit before. But they hadn’t. They had just slapped a fee three times larger than on my new account, perhaps hoping I wouldn’t find out how I could save some money.

Cynicism? Anger? The emotions that I feel are the same ones that people have when they approach me as a professional. As a certified financial planner I have much larger ideas that I need to convey to our customers and the general public than “I won’t cheat you or slip in something that benefits me and not you.”

But it’s tough to get through all that dreck first and get on to the important ideas.

I told the customer service representative that I didn’t mind giving up the penny in exchange for a lower monthly fee.

When I told this anecdote to one of my partners, he just had to raise the ante. “Last month, I got three pennies,” he said.

Another happy financial services customer.

———-

Harriet J. Brackey, CFP, is the co-chief investment officer of KR Financial Services, a South Florida registered investment advisory firm that manages more than $330 million. She does financial planning for clients and manages their portfolios. Before going into the financial services industry, she was an award-winning journalist who covered Wall Street. Her background includes stints at Business Week, USA Today, The Miami Herald and Nightly Business Report.

MONEY Scams

Thousands May Get Refunds on Undeserved Red-Light Camera Tickets

Red light camera
iStock

For years, Chicago and other cities have used red-light camera tickets to juice revenues. Soon, it looks like some of that money will be headed back into the bank accounts of drivers.

While countless drivers may very well feel like they have been given red-light camera traffic tickets without justification—and many would love to see these cameras disappear entirely—a new investigation apparently reveals that thousands and thousands of drivers in the Chicago area have proof that they were hit with tickets and fines they didn’t deserve.

The Chicago Tribune recently analyzed some 4 million tickets doled out via red-light camera surveillance since 2007. What researchers found has alarmed drivers and given conspiracy theorists fresh ammunition about Big Brother police tactics and even corruption regarding city contracts and roadside cameras in general. The paper found several instances of sudden inexplicable spikes in the number of tickets generated by cameras. Seemingly out of nowhere, cameras that usually captured a handful of infractions daily were generating dozens of tickets per day, sometimes for a couple of weeks, before returning to the normal pattern.

City officials and traffic experts haven’t been able to explain these sudden surges in tickets—tens of thousands of which investigators have deemed “questionable”—and the Tribune’s analysis concluded that there is “clear evidence” that they came about due to “faulty equipment, human tinkering or both.”

One example, for example, generated a dozen tickets to drivers rolling through right-hand turns for six months in 2011, and then produced 560 tickets for that same infraction over one 12-day period. The assumption is that someone or something changed how the rule was being enforced over that span, and no other bothered to inform drivers.

The traffic experts asked to look over the Tribune’s research announced right away that all drivers given undeserved $100 tickets should receive speedy refunds without hassle or the need to petition. Now those experts are being joined by several Chicago aldermen, who this week called on City Hall to launch its own investigation—and to hand out refunds whenever appropriate. Another Tribune story quoted one of the city leaders making the case for drivers:

“We want to find out what went wrong, and we want to see refunds where the ticket was wrongly issued,” said Ald. Scott Waguespack, 32nd. “That would be the way to do it. The basis would be refunds in cases where tickets were wrongly issued.”

What exactly happened to cause these odd sudden surges in cameras generating tickets? Unless the machines truly are taking over, it would seem all but certain that some human element was involved. It wouldn’t be the first time that something underhanded has happened with red-light cameras. Last summer, Chicago Mayor Rahm Emanuel decided to drop the contract with Redflex, the company then operating the city’s roadside cameras, after a $2 million bribery scheme involving Redflex and a city official overseeing the camera program was brought to light.

While Chicago drivers have a right to feel road rage about its camera system, which appears to be corrupt, incompetent, or both, the fines they’re paying are chump change compared with some of the camera-generated tickets handed out in northern California—which sometimes amount to $480 after all the fees are added up. One notorious roadside camera in Oakland, Calif., hit drivers to the tune of $4.2 million in tickets in 2010 alone.

Scott Waguespack, the Chicago alderman, told the Tribune that he and many others have complained over the years to transportation officials that traffic lights turn from yellow to red much too quickly. But no one did anything about it. “They were like, ‘Don’t worry about it, everything is cool,’” Waguespack said. “Well, clearly it wasn’t.”

Not only are city leaders calling for an investigation and refunds, but several lawyers are now in the process of gathering affected drivers for a class-action suit, or perhaps several suits.

That may be one reason why many cities have decided to do away with roadside cameras all together. Several San Diego County cities, for instance, pulled the plug on their roadside camera programs in recent months. The number of U.S. cities with roadside cameras is on the decline too, from 540 in 2012 to 508 this year. Depending on how things play out in Chicago and in other cities where drivers are protesting roadside cameras, that number could keep on falling.

MONEY Airlines

The New TSA Fee Should Change the Way You Book Flights

An airline passenger is patted down by a Transportation Security Administration (TSA) agent
An airline passenger is patted down by a Transportation Security Administration (TSA) agent at Los Angeles International Airport. Kevork Djansezian—Reuters

Airline passengers used to pay as little as $5 round trip in TSA fees. Now everybody pays $11.20, and you could be forced to cough up double that.

As of July 21, the TSA’s September 11 Security Fee structure has been changed, and all travelers flying within the U.S. will be paying more every time a flight is purchased. Passengers on nonstop flights must now pay $5.60 each way, up from $2.50, so therefore the TSA fee on a basic round trip consisting of two nonstop flights is $11.20, up from $5. Unfortunately, there’s no getting around that fee hike, which amounts to a 124% increase. The fees are automatically tacked onto the price of airfare.

In the past, fliers on nonstops paid less in fees than travelers on connecting flights: $5 for a round trip, versus $10. Now everybody pays $11.20, regardless of connections. So in addition to nonstop flights being superior in terms of saving time and avoiding possible delays and missed connections, there was the added bonus of saving a few bucks on the TSA fees.

Now that little bonus is gone.

Even so, it’s almost always still best to go with a nonstop, if possible. Sure, delays and technical troubles can happen on nonstops, but travelers are far more likely to encounter such hassles on connecting flights. With recent airline mergers, carriers have slowly been getting rid of the old hub-and-spoke systems at the same time they’ve been trimming back the overall number of flights. As a result, passengers are generally more likely to find nonstop flights to their destination of choice and more likely to run into extra trouble on connecting flights. (It’s less likely there will be another flight behind the one you missed, and even if there is it probably doesn’t have enough extra seats.)

By going nonstop, passengers also rule out the risk of being forced to pay extra TSA fees on connecting flights with unusually long layovers. In the past, budget travel experts sometimes recommended looking into flights with extra-long layovers as a tactic for saving money. The new TSA fee structure makes that strategy a little less worth the hassle. Now, if a connecting flight has a layover of four or more hours, fliers must pay $5.60 for each leg of the journey. So for a flight from, say, Providence to Los Angeles with a five-hour layover in Dallas, a passenger would pay $11.20 in TSA fees, as opposed to $5.60 to a passenger booked on a nonstop or on a connecting flight with a more reasonable layover wait.

Airfarewatchdog.com founder George Hobica gave the Arizona Republic an example of a recent flight deal that would be affected: $197 for a winter season round trip from Newark to a choice of destinations in the Caribbean. “The catch,” the article explained, is that “travelers had to stay overnight in Miami in both directions.” So their layover would obviously be more than four hours—so they’d get hit with double the usual fees.

Fliers booking multi-stop itineraries—usually for business purposes, but not necessarily—will also feel the impact of the new fee structure more so than others, as they’ll have to pay at least $5.60 for each leg of the journey, rather than as little as $2.50 in the past. Depending on the traveler, number of stops on the itinerary, and the reason for the trip, this might not necessarily be a deal breaker. But it absolutely should factor into the decision making process.

MONEY Kids and Money

How to Keep Your Kids From Racking Up Big In-App Charges

Kids have run up big bills on their parents' tablets. Paul Bradbury—Getty Images

The FTC says Amazon let children run up hundreds of dollars in unauthorized charges for in-app purchases. Here’s how to make sure your kid’s screen time doesn’t cost you a small fortune.

If you’ve been using your Kindle Fire as an electronic babysitter, beware that it might cost you more than a real babysitter. In a new lawsuit, the Federal Trade Commission says that Amazon has wrongfully billed some parents for unauthorized app purchases made by children.

How? Many free apps marketed towards kids let users make additional “in-app” purchases as they play the games. For example, download the free app “Tap Zoo,” and your kid can fill a virtual zoo with imaginary animals and habitats. Sometimes those items cost imaginary money – but other times, they cost real money, the FTC says.

The federal agency cites one customer hit with $358 on game bills (it doesn’t say which game.)

We’ve heard this story before: In January, Apple agreed to settle charges that it too had billed parents for unauthorized charges on kids’ games. But Amazon has pledged to fight the FTC’s lawsuit, arguing that the company has responded promptly to customer complaints, refunded purchases by kids and improved parental controls since launch.

As technology evolves to make it easier and easier to spend money, kids’ apps will likely remain a battleground. But in the meantime, here’s how to keep your kid’s virtual zoo running under budget.

The simplest solution: Turn off in-app purchases entirely.

On Kindle Fire, go to settings for the Amazon Appstore and turn off “in-app purchasing.” Apple products will let you disable the ability to install apps, delete apps or make in-app purchases. Just go to settings and tap “enable restrictions.”

At the very least, set up a password for in-app purchases.

Require that all users type a password before making any purchases – and make sure it’s a different password than the one you use to unlock your device. On Apple products, go to settings and tap “enable restrictions.” On Kindle Fire, go to settings and adjust “Parental Controls.” But here’s the problem: On Kindle Fires, each time you enter your password to buy something—say your kid badgers you into letting him buy that one new animal—the FTC says there’s a window of time when (15 minutes to an hour) when anyone using the device can continue making in-app purchases.

The FTC also argues that the password prompt is vague and doesn’t explain how much you’ll be billed. So enter that password with caution.

Do a little research before you let your kid buy an app.

Maintain a healthy suspicion of “free” apps. Oftentimes, free apps make money by collecting data about users, showing users advertising, or encouraging in-app purchases. But it’s not always easy to tell which apps will let your kid run up a huge bill. As of 2012, about 84% of the apps that let kids make in-app purchases were advertised as “free,” according to an FTC survey. Before you buy an app, read the full description to see if it allows in-app purchases. Also read reviews for the app, and try it out yourself before you let your kid play with it.

Switch to airplane mode or turn off Wi-Fi.

“Airplane mode” is a setting that turns off Wi-Fi – making it impossible to buy or download apps, or do anything else online. Quickly turn it on before handing over your device, and your kid should be able to play without making any new purchases. On Apple products, you can turn on airplane mode or turn off Wi-Fi under settings, or by swiping from the bottom of the screen and tapping the airplane icon. On Kindle Fire, you can turn on airplane mode by going to “Quick Settings” and then “Wireless & Networks.”

Did your kid run up a huge bill on a mobile device? How did they do it? Did you get a refund? Do you have any advice for other parents?

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MONEY Airlines

Tell an Airline How Much You Hate It and Get 8,000 Free Miles

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courtesy of Spirit

The obvious downside of Spirit Airlines' new promo is that you receive 8,000 miles to use on an airline you hate.

The “Hate Thousand Miles” promotion, introduced by Spirit Airlines this week, couldn’t be attached to a more appropriate company. Spirit, known for selling low-cost flights that come with a host of pricey “gotcha” fees, is famous for being a magnet for traveler hate. The carrier is routinely referred to as the Most Hated Airline in the U.S. What’s more, in the recent past, Spirit has more or less taken the stance that it doesn’t care that it is hated by people. “We’re not for everybody, and we’re fine with that,” a Spirit spokesperson told Businessweek in 2013, after the latest survey placed the airline at the very bottom of consumer rankings.

With its new promotion, Spirit seems to be fully embracing its reviled status. Or perhaps it’s trying to bury the hatchet. According to the terms of the deal, anyone with a Spirit Airlines frequent flier account can go to hatethousandmiles.com, spew some ill will, and then collect 8,000 free miles. While it’s assumed most haters will hate on Spirit, you can actually register a complaint about any airline at the site.

“Hate on us – or any airline of your choosing – and we’ll send you 8,000 FREE SPIRIT miles. You’ll be well on your way to earning an award flight with us,” Spirit explains.

Reward flights on Spirit can be had for as little as 10,000 miles one-way, so indeed, with 8,000 free miles, you’re almost there. But again, the downside is that you’ll have to fly on the airline you (probably) just officially targeted with hate.

What’s behind this oddball promotion? Publicity, for one thing. Spirit Airlines is known for being outrageous, with a history of invoking trending scandals (Anthony Weiner, the BP oil spill, Richie Incognito) in ads.

More important, Spirit is trying to use the hate campaign as an education opportunity. Following in the footsteps of Ryanair, Europe’s hated airline that launched a friendly rebranding earlier this year, Spirit stepped up efforts to explain its pricing structure and customer service policies with a campaign that began in May. The Hate Thousand Miles promotion is being viewed as a way for Spirit to call attention to the ins and outs of how it does its hated business, thereby, hopefully, dispelling some of the hate.

“We see this as an opportunity to educate consumers about the differences of Spirit, and in return for their hate, we’ll give them a little bit of love in the form of free miles,” the airline said in a statement to the press.

Perhaps Spirit will also read what it is that customers are complaining about, and make some changes accordingly in order to make passengers happier–or at least less filled with hate.

If you’re in the process of booking or flying on Spirit and want to vent your hate right away, however, there’s a note in the fine print of the Hate Thousand Miles offer you should be aware of: “Submitting your hate feedback is not a means to submit correspondence to our Customer Support team.”

In this case, you’ll need to send your hate message twice: once to customer service, and secondly to the Hate site in order to get your free miles. If you want them.

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