A recent report shows that America’s three biggest banks - JPMorgan Chase, Bank of America and Wells Fargo earned more than $6 billion from ATM and overdraft fees. Yes, you read that right. Six billion dollars ATM and overdraft fees. And it looks like those fees won’t be slowing down or going down anytime soon. In fact, according to Bankrate, last year was the tenths straight year of increase for “out of network” ATM fees.
You work hard for your money and you don’t want to waste on little things like fees that just make banks richer. Luckily, there are millions of savvy Americans who avoid banking fees and you can join them!
First let’s look at the common fees that banks charge
This is is a monthly or annual “maintenance fee” for certain accounts. Some of these fees can be waived if you keep a specific minimum balance.
Minimum Balance fees:
Some banks have a minimum balance requirement. You want to check what that balance is and what the requirement for the fee is. For instance, does your balance meet the requirement on average or at the end of the month or at any point in time?
Overdraft fees occurs when you spend more than you have in your account. Keep up to date on how much is in your account and remember that some charges do not go through right away so even if you think you have enough, you may want to double check if you have any pending charges.
If you use an ATM that is not a part of your bank’s network, the ATM owner may charge you a fee and your bank could charge you a fee as well. According to Bankrate, that average fee for using an “out of network” is now $4.57.
Foreign Transaction Fee:
If you travel abroad, your bank may charge you a foreign transaction fee.
Some banks charge inactivity fees if you do not use your checking or savings account.
Account closing fees:
Most banks require you to have your account open for a certain amount of time before you close it. If you close your account early, you may be charged with an account closing fee. Some banks charge a closing fee, no longer how long you have been when them.
These are a few of the biggest bank fees. Now, the question is, how do you avoid them?
It can feel daunting to check your bank balance but you should do so on a regular basis. This will help you avoid overdraft fees and help you keep your minimum balance to avoid minimum balance fees.
You can sign up for your bank to email or text you if your balance falls below a certain level.
Many banks will offer free service or reduction in fees if you have multiple accounts, such as a checking and a savings account with them.
Or if you must an ATM that is out of your bank’s network, we recommend taking out larger withdrawal to avoid having to keep getting cash out.
Many banks will wave maintenance fees if you direct deposit your paycheck into your check account.
This does not always translate to waived banking fees but if you are a good customer and happen to slip below the minimum balance or overdraft, you may want to call your bank and request for them to waive the fee. It’s always worth asking!
Banking fees can add up quickly if you are not paying attention asking the right questions can help you avoid banking fees. An educated customer and savvy spender can avoid these banking fees with these tips.
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