Ways for Avoiding Excessive Bank Fees

Learn to Avoid Excessive Bank Fees

By: Jon Boyd Barrett

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Bank fees are annoying. There are no two ways about it. You give your money to store in the banks so that they can use those funds to invest in their private projectsBut rather than being treated as valued investors, which is effectively what we are, the banks extort us by charging outrageous fees. We are charged for using ATM machines outside of our bank’s network, for writing too many checks and in some cases even just for receiving our monthly paper statements.
Here we outline some of the ways in which one can successfully minimize these unfair bank charges.

Chose the Right Bank Account

Some banks are better than others, but choosing the right bank account for you depends largely on your needs. Many banks will offer ‘”free checking” with plenty of benefits BUT only on certain conditions, i.e. that you keep a minimum balance in your account. Some accounts won’t require you to keep a minimum balance but might limit the number of checks you can write or the number of transactions you can make.

Determine what it is that you need from your bank account and make sure to compare at least 3-4 banks. Ask to see a schedule of fees for each account that you consider.

Credit Unions

See if you qualify for a credit union. These are non-profit organizations that aren’t looking for every possible way to acquire profits from their own customers. Credit unions will usually offer completely free checking and generally have much lower banking fees than regular banks.

To find a credit Union near you, go to Credit Unions Online or National Credit Union Administration.

Keeping Track to Avoid Overdraft Fees

Follow your spending online and if necessary check your balance everyday*. This is hands down the best way to avoid getting into overdraft trouble and bypassing those nasty fees. You will be able to see what you have available to spend per day, whether you need to transfer funds form a another account or deposit more money, and if you have already gone overdrawn you may be able to salvage the situation before you’re hit with a bunch of charges.

Some banks offer an e-mail notification service for when a bank balance goes under a certain threshold, so check to see if that is something you can implement with your online banking.

*Note that on your statements, available balance is different from pending balance. Always plan your spending based on the pending balance, as this takes into account any pending transactions that have yet to reflect in the so-called available balance.

Opt-Out of Overdraft Fees

The banks might lead you to believe that they are providing you with an invaluable service by allowing your checks and transactions to go through when you don’t have the available funds. In reality, this is just a way in which they can extort you for $20 -$30 for each minimal transaction in the red. What many people don’t know is that you can actually opt-out of this service, meaning that when you have insufficient funds your card will simply be declined, and therefore will receive no overdraft fee. Ask at your bank about opting-out of your overdraft.

Overdraft Protection

Overdraft protection means that if you have insufficient funds in your account to pay for a transaction, the money will then be automatically taken from your savings account or from a line of credit given at a fixed rate. Overdraft protection will often require you to meet some terms and conditions, such as a minimal balance and a worthy credit rating.

ATM Fees

Personally, I hate these fees. It just seems so unjust. You get charged $2 - $3 for taking money from ATM machines out of your network, and then you get charged a further $2 - $3 from your own bank for not using their ATM machines.
There are a few ways to avoid this:

Look for a local bank or credit union that participates in a surcharge free network. Some of these networks are: Allpoint, Co-op Financial, CU HERE Premium network and STAR, each of which boasts tens of thousands of networks nationwide.
Sign up for an internet bank such as Bank of Internet or Everbank. These banks will reimburse your fees up to a specified amount (usually $6 - $7 a month). Better yet, try Metropolitan National Bank or Schwab Bank; two banks that will reimburse all your ATM fees no matter where in the world they are incurred.
Instead of using the ATM machines, go to a supermarket or shop that offers cash back on purchases. Even if you buy a $1 candy bar, it will still be cheaper than the fees you would otherwise incur.
Limit your need for trips to the ATM by taking out more money at a time.
Some banks only operate within local areas and so if you travel a lot, open an account with one of the major banks so that you have more network ATM machines available to you.

Buy Checks Elsewhere

When I recently opened a business bank account with a bank that shall remain nameless, I was shocked to discover that I was automatically charged $60 for a folder of business checks. This prompted me to look into ways of avoiding this fee in future, and it didn’t take me long to find a whole array of online custom check manufacturers. Now, whenever I need checks I order directly from these companies at a fraction of the cost that my bank would charge me. You just choose the design you want, give them your banking details and feel happy that you have avoided being taken advantage off by your bank.
You can order these checks from VistaPrint, StylesChecks, or simply search Google.

E-Statements

Some banks are starting to charge for those of us who still receive paper statements. The answer to avoiding this charge is simple: switch to e-statements. Not only does this eliminate any fees, it is also more reliable and environmentally friendly. If you still need paper statements for whatever reason, you can print out the e-statement.

Request a Refund

If there are bank fees that you deem to be unfair or a little over the top, you can often get a full or partial refund simply by requesting it, especially if you have been a worthy customer in the past.

Simply call your bank, request to speak to a supervisor and then plead your case. Tell them how long you have been a customer and how helpful it would be to you if they could give you a courtesy refund.

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