Traditionally used as part of the larger phrase "To be nickled and dimed to death", referring to the undesired price of upkeep for a certain item. More fundamentally, it refers simply to seemingly hidden ongoing expenses which, over time, add up to a large expense.
Thurgood: "Whats up nigga, you gonna nickel and dime (2) me today as usual?"
Samson: "Aiight dogg I'll give you this dime bag here for $17."
Thurgood: "Sheeit, all I got is this $16. I'll get you the $1 later."
Samson: "No can do. I need it all up front."
Thurgood: "Man why you gotta go and nickel and dime (1) me like that?"
When banks secretly charge and take money from you for stupid violations and penalties: ie ATM machines, limited checking, under the minimum balance of an account, etc. and usually result in pissing off their customers and gaining more money.
"Shit! I had $99.50 in my savings, but since the bank minimum is $100 for the account to stay active, they took out $4.50 in penalty fees!"
"Damn Tom, they're nickel and diming your ass!"