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What Is an Incidental Fee?

Esther Ejim
By
Updated May 16, 2024
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An incidental fee is a stated amount that may be charged as a safeguard against some sort of anticipated shortfall in payment for a service, by certain organizations as a means of financing certain services or as an automatic payment that is charged to students by various schools. This type of fee may be used by a school for various purposes, and the students would be expected to pay the incidental fee as part of their tuition. The fee may also be charged as an automatic component of the total fee charged to a customer for other services.

Usually, schools expect their students to pay this fee so that the school can fund certain projects that would suffer in some form without these funds. For instance, the fee could be used to fund health-related services, such as counseling. The fee may also be used to fund the school’s recreational center as well as other services utilized by the general school community that may not have been an easy task without the charge of an incidental fee. Different schools have their own exact charges and calculations by which they arrive at the final figure.

Another example of incidental fee is the type that is charged to customers when they book hotels. Since most hotels require some form of credit card or debit card in order to book guests, it makes it easier for them to charge customers this type of fee. The incidental fee in this case is in the form of a hold that is placed on a certain amount of funds charged to the card of the guest, apart from the normal deduction or payment for the stay. As such, the incidental fee means that the hotel will hold the money, through the bank, as a collateral for any damages or other incidentals that may occur during the stay of the guest. If the guest stays without any incident, the money will be credited back into the account of the guest after the bank releases its hold on the funds.

Even airlines and banks charge their customers some form of these fees. In the case of banks, the fee is the interest charged to customers in order to grant them loans. For the airlines, such fees include items like the money charged for checking in baggage and also the money that is charged to a customer when he or she changes the date or time for a flight previously booked.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Esther Ejim
By Esther Ejim , Former Writer
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and executive director of a charitable organization, she actively encourages the well-being of vulnerable populations through her compelling storytelling. Esther's writing draws from her diverse leadership roles, business experiences, and educational background, helping her to create impactful content.

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Esther Ejim

Esther Ejim

Former Writer

Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and...
Learn more
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