For many, there is a love-hate relationship with banks. You love the convenience of parking your money in a safe place and the ability to pay bills conveniently. On the other hand, you hate the constant fees and surprise charges that can keep your finances off balance.
As regulators institute laws protecting consumers and regulating specific charges, banks look for other sources of income by changing their fee structure. For example, a decade ago nearly every bank offered free checking accounts because banks made millions from overdraft and over the limit fees. Now, new laws have reduced overdraft fees and nearly eliminated over the limit fees, in exchange nearly all checking accounts now come with maintenance fees and minimum balance requirements.
Sneaky Bank Fees You Might Be Stuck Paying
- Account or Maintenance Fees
- ATM fees
- Foreign Transaction Fees
- Overdraft Fees
- Return Deposit Fees
- Statement Fees
- Teller Transaction Fees
- Inactivity Fees
- Account Closing Fees
- Debit Card Replacement Fees or Overnight Fees
Understanding the banks rules and monitoring account activity can eliminate nearly all of the fees associated with owning a checking account. u
The days of free checking accounts have nearly disappeared, leaving consumers paying monthly maintenance fees. Balance requirements are either calculated on a certain day of the month, the average monthly balance, or a minimum your account cannot fall below. Monthly fees average $10, which adds up to $120 per year in fees.
Avoid the fee with an account review. A personal banker can determine current balances, the number of transactions, and type of activity you have on the account. Linking the account to a second account like a savings account, credit card, or loan will often meet checking account balance requirements, eliminating the need to maintain a certain amount in the checking account.
ATM Fees and Other Options
Foreign ATM fees are charged when you use an ATM not associated with your bank. These fees are charged by both your bank and the “foreign,” bank regardless of how much money you withdraw. Take out $20 and pay upwards of $5 in transaction fees. Mini statements and checking your balance will also cost you, even if you don’t withdraw funds.
Avoid the fee by using your bank's ATMs. If they are not convenient, make a small purchase at a store, allowing cash back, and you will avoid fees altogether. Most grocery stores, convenience stores, and mega stores like Walmart or Target offer cash back on purchases of any amount. For balances and activity, use the mobile or online features to access your account.
Foreign Transaction Fees
In days past only those who traveled internationally ran across foreign transaction fees. Today, with the increase in online shopping, each purchase from a company in another country, can also trigger foreign transaction fees of around 3% of the transaction cost, plus the currency conversion rate. These fees can add up if you buy online or travel overseas.
Avoid the fee by banking with an institution which does not charge the fee. You can also avoid the fee by using a credit card not charge a foreign transaction fee. Seek out credit unions and banks which offer credit cards and debit cards without foreign transaction fees.
Overdraft fees are either NSFs or overdraft fees. An NSF charge occurs when you do not have sufficient funds in the account to cover the charge, and the bank returns the charge unpaid. Typically, this would be either a check or bill pay transaction. An overdraft fee occurs when the bank covers the transaction and causes the account to go into the negative. Both fees can be upwards of $35 per transaction.
Avoid the fee by opting out of overdraft protection. This feature will result in a transaction decline instead of an overdraft.
Another easy solution to avoid overdraft fees is to add an overdraft account by linking your checking to saving, money market, or line of credit. When the overdraft is activated, you are charged a smaller account transfer fee, rather than an overdraft.
Other ways to reduce overdrafts is through account monitoring. Text alerts or emails that you can set up when your account falls below a certain balance, and online or mobile banking provides easy account visibility, monitoring and access.
Return Deposit Fees
Bounced checks or issues with a deposit can result in a return deposit fee ranging from $15 to $35, even though it is due to someone else's error.
Avoid the fee by verifying the availability of funds before making the deposit. You can cash the check at the recipient’s bank, although there may be a check cashing fee for non-customers. Online transfers may be the best choice because it eliminates the need for a check and is a service available at most institutions.
Statement fees are common under two circumstances: If you receive paper statements, and if you use a foreign ATM to check your balance. Paper statements usually cost $2 per month to cover the cost of printing and mailing monthly statements.
Avoid the fees by signing up for online statements. If you need statements for tax purposes, print them or save them electronically. Most banks offer statements going back up to seven years.
Other Miscellaneous Fees
Teller transaction fees are common with starter checking accounts which encourage to the use of the banks remote channels such as online, mobile, or ATM banking and limit teller use. Avoid the fee by using alternate banking resources. With image deposits, it is possible to maintain a checking account and rarely visit a physical branch.
Inactivity fees may occur on accounts without regular activity. Avoid the fee by closing accounts you no longer wish to maintain.
Account closing fees often apply to newer accounts that are closed soon after opening. Banks have different time frames ranging from 3 to 6 months. Generally,u after that time, you are free to close the account without fees. Avoid the fee by only opening accounts you plan to use. If you find yourself in the situation where you need to close an account, request a fee waiver.
Debit Card Replacement Fees
The first debit card is always free, but a replacement can result in a fee. Many banks replace a credit or debit card free of charge if you are willing to wait a week. A card replacement fee is common if you want the card overnight, and you must be able to sign for it. Avoid the fee by freezing it if you think you have misplaced it, rather than canceling it. A canceled card must be replaced, where a suspended card can be re-activated.
Most bank fees are optional, and you can save a lot of money over the course of the year by paying attention to fees associated with your checking account and finding ways to bank for free.
If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a FREE financial analysis. Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high interest credit card debt any longer. Call (855) 250-8329 or get in touch with us by sending a message through our website here contact-us