Being nickel and dimed refers mainly to being squeezed out of extra money through unnecessary costs or hidden fees or deceptive charges by companies. It is akin to squeezing out just a little extra money from you, with the expectation that you'll just accept it as the cost of doing business. There are plenty of examples of being nickel and dimed which I will elaborate on.
T-Mobile prepaid advertise their prepaid plans as monthly such as their unlimited phone, text, and data plan for as low as $50/month but that price isn't accurate, nor is it completely true. You could make a strong argument that it's false advertising, since the program itself is not based on a true monthly fee but on a thirty-day preplan fee, so that given that there are 365.25 days in a year but only 360 days (12 x 30) for 30-day periods, you as a consumer will end up paying for an extra month, around 70 months into your prepaid plan when your yearly shortfall of 5.25 days will equal another payment of $50. Consequently, whereas the plan states it's $50/monthly if you were to actually convert the 30-day plan into a monthly plan it would be about $.714 more per month; so their monthly plan is really not $50 but is $50.714 on a monthly basis which is an increase of 1.43% which is pretty much pure profit to their bottom line, unless consumers as a whole were to take offense by it, and switch to another carrier.
Credit card companies have all sorts of charges that they can nickel and dime you with, and these charges can quite easily get beyond the mere nickel and dimes. If you are even one-day late they can hit you with a $35 late fee or possibly more, a variable interest switchover in which instead of paying a fixed interest rate because on your late payment you will thereby pay a variable "penalty" rate as much as 29.99% or possibly more. All of this for being one-day late in which your balance may be trivial, your past payment history may be excellent, and there may be legitimate extenuating circumstances or possibly a mistake on the credit card issuers side. However, in fairness to the credit card companies, they are often willing to work with you on these penalties if you contact them, but if you do not, you will default to these penalties. In addition, the one truly unnecessary nickel and dime charge by credit card companies is the "minimum" credit card interest fee, as for some reason some credit card companies claim or have no desire to charge you the correct interest on low balances but instead round you up to their minimum interest charge of $1.50, or possibly more. There isn't a single valid reason for this to be done, except to nickel and dime you.
Utility companies have late fees, service restoration fees, deposit requirements, and processing fees, and if you somehow fall behind or fail to make timely payments, they are in principle really piling on the misery for a consumer that clearly is having trouble making just the normal payment. Since most utility companies are publicly monitored, it is both unnecessary and mean-spirited to charge any additional fees which are above and beyond the real cost of doing business in order to spite and needlessly penalize the consumer. Water, electricity, and gas are absolutely vital for modern-day consumers to make their home, habitable; therefore the termination of these vital functions should not be done lightly or without due consideration.
There are plenty of nickel and dime fees that consumers deal with on a daily or monthly basis. These fees can often be overcome by asserting your consumer rights but that takes diligence, effort, and savvy on your part. Not everyone has those same capabilities or knowledge, and is these people that suffer most from being nickel and dimed.