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11 Annoying Bank Fees You Can Avoid

11 Annoying Bank Fees You Can Avoid

It is difficult to operate in today’s world without a bank account, yet the fees charged by many banks may make customers wonder if they would be better off stashing cash in their mattresses.  The best defense against bank fees is knowing what they are and how to avoid them.  Here are ten of the most common:

1. Minimum Balance Fee

Some banks require accounts to have a minimum balance.You may be charged a fee if you don’t meet this requirement.  In some cases, your account may even be closed if you leave it underfunded and unattended. To avoid this, call your bank, ask exactly how much money you need to have in your account, and keep your balance above that minimum.

2. Account Closing Fee

You might be charged a small fee for closing your account at certain banks.  You should ask about account closing fees before you open an account.  If the fees are unreasonable, choose another bank.  Another strategy to avoid this fee is to withdraw all funds from an account, but leave it open. You can open an account elsewhere and treat this one as “closed”. The bank will likely close it on its own after some time at a zero balance. Be sure that your bank doesn’t charge an inactivity fee if you use this option.

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3. Inactivity Fee

This is relatively uncommon, but a bank might assess a fee to an account that has been inactive for some time. If this applies to your account, make sure to “check in” at least once a month with a transaction or two. This can be as simple as grabbing $20 from the ATM, or as automatic as getting direct deposit for your paychecks.

4. Lost Debit Card Fee

If you misplace your debit card, many banks will charge you to replace it. This fee is usually worth paying, to give you the convenience of easy on-the go account access and peace of mind knowing that your lost card can’t be used by someone who finds it. Some banks may offer a temporary card at the local branch, foregoing the cost of rush delivery of the replacement. Nothing, however, beats due diligence in keeping track of your card so you don’t lose it in the first place.

5. Foreign Transaction Fee

Most banks will charge a fee for withdrawing cash in another country. There is little you can do to get around this, but you might be able to find a more favorable fee by exchanging your cash elsewhere. Consider visiting a currency exchange institution before your trip to compare the conversion fees. Some banks don’t charge for foreign transactions; if you are a frequent international traveler,  find these banks and do business with them.

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6. Paper Statement Fee

It’s 2013, and almost every bank wants to avoid mailing you a paper statement if they can, and they may charge you a fee as an incentive to go paperless.  If you’re a tech-savvy individual, you probably don’t want a paper statement anyway. So, opt out. Every major bank offers this option. Instead of a paper statement, you will receive electronic statements via the bank’s online portal or by email. You’re also doing the environment a favor!

7. Online Bill Pay Fee

Some banks will charge you to use their online bill-paying service. If this is the case, investigate other bill-paying portals or find a bank that offers this service without a charge. You will find that most of your bills can be paid online for free via the billing party’s own website.  Use your debit card and the funds will come directly out of your checking account with no fee.

8. Overdraft Fee

Almost every bank will charge you for an overdraft. Obviously, you should avoid this fee by not spending more than you have. To avoid accidental overdrafts, call and ask your bank to decline transactions on your debit card when the funds are not available. It is possible to set up automatic transfers from savings to cover overdrafts, and many banks offer overdraft protection that is less expensive than the fees for insufficient funds. If you do accidentally overdraw, you may be able to ask your bank for forgiveness once or twice, especially if you have a good banking history with few overdrafts.

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9. Insufficient Funds Fee

There is a subtle difference between and overdraft fee and an insufficient funds fee. Both are caused by initiating a transaction for more money than you have in your account.  In the case of an overdraft, the bank pays the item and charges you a fee, leaving your account balance in the negative.  If the bank returns the item (usually a check) without paying it, this activates an insufficient funds fee.  The amount may or may not be the same as for an overdraft, and often there will be an additional returned check fee imposed by the company that had the unpaid check returned.

10. Service Fee

These are small, usually inconsequential fees for various services the bank may offer upon request.  Some fee-based services include statement printouts, stop-payment charges, and checking account reconciliation or research. Some of these fees can be avoided by careful record keeping.  You may also be able to get around these fees by researching online options, such as downloadable statement PDFs. Ask your bank what they will and will not charge you for, and plan accordingly.

11. Returned Deposit Fee

When a check that you have deposited bounces or there is some questionable or missing element on said check, you will likely be assessed a returned deposit fee. Double-check all deposits to be sure that they are properly filled out and signed, and only take checks from people or institutions that you trust.

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Keep in mind that there are exceptions to everything on this list.  Any reputable institution will offer you a fee schedule, including the exact details of how fees are charged and how to avoid them.  Take  responsibility for being informed, and you will save your hard-earned cash.

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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