Four easy ways to avoid bank fees
Four easy ways to avoid bank fees
Banks earn income from a variety of sources. Credit card loans, home mortgage loans, business loans, and student loans comprise much of their core revenue generating products. But there are other sources that are just as valuable as these traditional services. They’re called account fees, and banks earn billions each year on the revenue they collect from financial account holders. It’s up to you to learn what these fees are and how to refrain from handing over your hard earned cash unnecessarily to financial institutions. Four easy ways to avoid bank fees
Many customer incur bank fees when they don’t plan how to use the benefits of their accounts efficiently. This can cause customer frustration when there’s less cash on hand than expected to pay bills and other expenses. To keep more of your hard-earned money for your use, here’s a list of common bank charges and how to avoid them:
- Overdraft fees can cost an account holder hundreds of dollars each year, if not more. There are two ways to avoid these. First, review the balance in an account before accessing money in it. Be sure to factor in any pending automatic payments. This is an important point to remember. If an individual forgets about upcoming payments, it can cause that person to assume there’s a higher balance in the account than there really is, and spend more than he or she should as a result. This might have the effect of forcing electronic payments to bounce. Both the bank and business attempting to withdraw money from the account will likely charge overdraft fees for this inconvenience, leaving the account in an even deeper deficit.
Second, set up overdraft protection as a backup plan to avoid fees when there isn’t enough cash in an account to make a payment. Link the account to a credit card, checking or savings account that can act as a reserve source of cash to cover the overage. Ask your bank how to do this if you’re unsure of the process.
- When a person needs cash on the go and there aren’t any in-network ATMs available nearby, non-network ATMs can do the job. Fees from accessing out-of-network ATMs, however, can easily cost $4 or more per transaction. If there are no free withdrawal options within your vicinity, go to a nearby store that offers cash back with any purchase. Instead of handing that $4 to the bank, spend it on yourself. Some stores might require a minimum transaction amount for a cash back withdrawal, so ask before jumping in line with a .50 cent purchase.
If finding a convenient ATM location is a persistent problem, consider opening an account online with a bank that offers better free ATM access. Some banks also reimburse customers for using out-of-network ATMs, to a certain limit. These are also worth consideration to avoid ATM fees.
- Account maintenance fees are becoming more of the norm as some banks have shifted away from free checking. While these fees can add up fast over the course of a year, there are usually ways to avoid them. Some banks waive the fees with direct deposit or when an account holder maintains a minimum balance. If you have more than one checking account, it might be possible to split your direct deposit to both accounts. Send the minimum amount to avoid banking fees to one account, then send the rest to your primary account. Speak to your employer about this possibility.
- An often overlooked opportunity to avoid new bank fees is to keep an eye on monthly statements as they become available. This allows an account holder to learn about new changes to a bank fee structure and to take action to avoid them. This is also why it’s important to ask for paper copies of your statements and review them every month when they arrive in the mail. If your bank charges for paper copies and you don’t want to incur the charge, ask for email reminders when the statements become available, then review them online as soon as possible.
While your bank is hungry for cash to boost its bottom line, you don’t have to be the one to feed it. Stay aware of the fee structure for your accounts and take steps ahead of time to avoid unnecessary charges. It’s your money, and you should keep it where it belongs – in your possession.