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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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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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