8 'free' things that aren't

Johnathan Petit

Free has to be one of the most abused words in the English language.

It's become so bad that we are always skeptical, and look for asterisks or legal copy to see what the catch is.

But, even when there doesn't appear to be one, free is not always what it's cracked up to be.

Here are eight instances when something free may end up costing you in the long run.

(See also: 20 Ways to Entertain Your Kids for Free) 

1. Free shipping

As an occasional eBay seller, I know the power of free shipping. In fact, one of the most popular ways to sort products on eBay is to click the box that says "free shipping."

When researching this, I discovered that it was better to charge $19.95 for a product and offer free shipping than it was to charge $14.95 and $3.95 shipping. As you can see, the latter is actually the better deal — but people don't see it that way.

So the next time you are looking at deals online, do some comparison shopping — especially on eBay. You will find that on many occasions, identical products work out cheaper when you actually opt to pay separate shipping.

2. Free checking

Many banks will lure you in with free checking, but don't sign on the dotted line until you really understand what's being offered.

For instance, my "free" business checking account comes with a $15 monthly service charge if I don't pay at least three bills each month using the bill-pay service. That one was news to me.

You can also find a whole host of fees that you will have to pay to handle your money, ranging from wire transfer fees and checkbook costs to ATM fees, minimum balance fees, and others. Oh, and the second you go into the red, expect to be hit with a whopping fee (usually around $35), even if it was only by a few bucks for a few hours

3. Free big prizes

We're not talking about winning a couple of tickets to a show or an mp3 player. If you are lucky enough to win something big, like a home, fancy vacation, or a car, be prepared for the cost implications that will follow. The big problem being taxes.

For instance, many people on the show Extreme Home Makeover were thrilled to see their old home become an extravagant mansion. But once the cameras had gone, they were left with massive property taxes, big energy bills, and steep insurance hikes.

Their financial circumstances didn't change to cover those costs, and they either had to sell, take out a home equity loan, or in some cases, declare bankruptcy.

If you win a big car, or dream vacation, you will have to declare this to the IRS. So, be careful before saying yes to anything like this. It may be a dream come true, but can you afford it?