Could your bank be hiding some things from you? Have you checked the fine print on your bank fees?
When I was younger, I opened my first checking account with Bank of America. The checks from my first part-time job didn’t amount to much, and I didn’t bother to worry about the fees associated with banking. Now, if I’m not paying attention, I could lose not just my shirt, but an entire wardrobe, thanks to bank fees incurred by my checking, savings, and credit card accounts. So I thought to give these fees a once over and see what I can do to avoid them.
The last time I incurred an overdraft fee, it wasn’t even my fault. My bank at that time happened to process my rent check twice, but once I pointed out the error to the bank clerk, she waived the overdraft fee. If you’ve got such a fee in question, don’t hesitate to ask your banker about it. This goes to show how easy it can be to trigger an overdraft fee: be aware that in some banks, larger checks and debits are processed before smaller ones. This can lead to a multitude of overdraft fees instead of just one fee for the largest overdraft amount. So if this happens to you, find out if this is something you can get the bank to waive for you.
Since an overdraft fee can range from $25 to $35, don’t get caught off guard: sign up for some form of overdraft protection service. In my case, if my checking account doesn’t have enough money to cover my check or debit, then I have some money transferred from my high yield savings account in HSBC Direct. Chase and some other banks will even let you use your credit line as a back up, but you should make sure the fees are worth it before you sign up.
Don’t mistake this type of overdraft protection service with “courtesy overdraft” service (also known as “bounced check protection”), which gives the bank a chance to lend you the money for overdraft coverage, with strings attached of course. As noted in an article from Bankrate.com, some banks will even charge you for each day that your account’s overdrawn.
Why is it that every time I visit an ATM outside my network I feel like I’m getting penalized? One ATM I know about charges $1.25 per transaction, which seems like a bargain compared to the $2 that Bank of America charges me for visiting an ATM outside of their network. If you’re outside the country, the fee leaps to $5. The next time I need a quick $20, I’m going straight to a teller.
Cash Advance Fees
The last time I looked at my credit card statement, I noticed the fine print stating that my interest rate for cash advances is over 20%. I find Capital One’s TV ads amusing, but when I looked at their Platinum Prestige card, I didn’t find it amusing at all that the cash advance fee was 3% of the amount of the cash advance (not less than $10). If I ever get around to trading my credit card for one with a different rate, I’m going to ask if I can get that cash advance fee waived.
Stop Payment and Returned Deposit Fees
There was one time when I wrote a $100 check to someone, only to learn that he lost it months later. Bank of America has a stop payment fee of $25 in my state — that’s a quarter of the check I’d written! I wrote the guy another check and breathed a sigh of relief when he took it straight to the bank; if I need to stop a payment in the future, I’m going to ask my bank manager what she can do to help me. As for returned deposit fees, I’m avoiding those by calling the bank to verify the availability of funds before trying to cash the check.
Statement Balancing and Research Fees
As the banks tend to charge $20 an hour for statement balancing, it was worth it to learn how to do it on my own. Quicken, Mint, or other services can help in this area. You can avoid research fees by keeping your statements and canceled checks organized.
The Available Balance — Not!
My family used to prefer using a debit card at the gas pump. Stick the card in, run it through as a credit card transaction, and zoom off, right? All seemed fine until one of us went in for lunch and got denied a value meal. This happened because the gas company placed a hold on our account to cover the gas. It really irked me that the bank allowed the gas company to hold our money hostage this way. The last time I paid for gas, I paid with cash instead.
Don’t let banks turn evil on you — if you’re charged a fee you deem unfair, keep your shirt on — and talk to your banker!