Five bank fees you should stop paying
(ARA) - If you're tired of getting nickeled and dimed by your bank,
it's time to switch. Irritation with unnecessary fees is the No. 1
reason consumers switch banks, according to a recent survey by Javelin
Strategy and Research.
"Stopping useless fees forever is a smart way to make your money go
further," says J.J. Montanaro, a certified financial planner with USAA.
"The savings can add up to hundreds of dollars a year, which can be
used to pay your bills instead of your bank."
To get a grip on what fees your bank is charging, Montanaro suggests
carefully reviewing your most recent checking and savings account
If you're paying these five fees, it's time to look for a bank that
doesn't charge them.
1. Overdraft fees
While the new overdraft
rules that went into effect on July 1 requires
financial institutions to notify customers of their options to opt-in
to overdraft fees, finding a bank that chooses to opt-out of the
"opt-in" legislation can save you cash. Some banks - like USAA Federal
Savings Bank - have eliminated overdraft fees on ATM and debit
However, if you've decided to opt-in to overdraft fees, you're not out
of luck. Many banks provide overdraft protection - allowing purchases
exceeding your account balance to be pulled from your savings account
or put on your credit card. Check with your bank to see if this service
is free. If so you'll avoid
overdrafts and avoid having your purchase declined.
If you choose a credit card as your back-up payment option, be sure to
pay off your balance immediately to avoid paying interest, Montanaro
2. ATM fees
If the ATM you use is not affiliated with your bank, that ATM's bank
may charge you for ATM/debit card withdrawals or other transactions.
While a $1.50 to $3 ATM fees may seem nominal when you really need to
access your cash, they can add up quickly.
Some banks allow you to use any ATM without charging fees. If your bank
doesn't, plan ahead and only withdraw money from ATMs affiliated with
your bank. Or you could take advantage of fee-free, cash-back options
now offered at some local grocery or convenience store chains when
making a purchase.
Better yet, switch to a bank that reimburses you those fees. For
example, USAA rebates up to $15 a month in ATM fees - a perk that could
add up to $180 a year in savings.
3. Check fees
Cut fees by quitting checks, or at least using less of them. Unless
your bank offers free checks, switch to paying bills electronically.
This usually fee-free service allows you to pay bills anytime and
anywhere you have access to a secure Internet connection.
4. Minimum balance fees
Your bank may expect you to keep a minimum balance in your account and
charge you a fee if you slip below. You can side-step these fees by
carefully matching your situation with the account requirements. For
instance, look for an account that waives the fee for direct deposit of
your paycheck, or find an account with no minimum balance requirement.
"In addition, take advantage of helpful tools such as free online
financial management tools, account alerts sent via e-mail or text
messages that are triggered when your account runs low," Montanaro says.
5. Fine print fees
Are you charged a fee for monthly account maintenance, or does that
bill you receive in the mail each month cost extra? "It pays to sweat
the small stuff and fully understand what your bank is charging you,"
Montanaro says. "Instead of paying your bank to send you a paper bill
each month, see if you can sign up to receive it electronically for
free. This option will save you money and can make it easier to keep
track of your statements."
Montanaro adds that investing time to manage banking
needs and find a bank that doesn't overwhelm you with fees
can add up to real savings of potentially hundreds of dollars each
year. "In times like these, it's important to make every dollar count
and ensure it's working for you - not your bank."
Courtesy of ARAcontent