Banks are competing for customers so remember to consider and compare all fees you have to pay when opening an account or evaluating your current one. Here are some common checking account fees to be aware of:
Overdraft fees are currently the biggest money makers for banks. They make huge profits by letting their customers spend more than what they have in their checking accounts and charging on average $34 in fees for this service. Over half of the average bank’s earnings is in overdraft fees. According to a SNL and CNN study, the three largest American banks made over 6 billion dollars in overdraft fees. That’s just three banks. There are several banks in the U.S.
Avoid overdrafts. Opt out, track your spending, check your account balances daily, and sign up for mobile alerts. With hacking and security breaches at all-time highs, it’s crucial to check your accounts regularly. Be sure to report any suspicious activity promptly.
Though the bank offers this service it is your responsibility to keep track of how much money is in your account. You must manage your money wisely.
ATM fees are another big source of revenue for the banks. Each time you use an ATM that isn’t in your bank’s network, you pay an average fee of $4. You can minimize or avoid ATM fees by only withdrawing at your bank ATMs, getting cash back at stores, and at many Post Offices during a POS (Point of Sale) transaction, like buying stamps.
If these options are not available and you have to pay an ATM fee, you can minimize fees by not making frequent trips to withdraw your cash. Think about how much you will actually need. You don’t want to pay $4 every time you withdraw $20 from your checking account, especially if you needed $60.
You can also open an ATM fee-free checking account with an online bank to avoid the fees. Keep in mind you may still need to remain a customer of a brick and mortar bank to bank with an online bank.
Whatever your course, the best thing you can do concerning ATM fees is go to your bank and get a copy of its fee disclosure statement. If you bank at an online bank, you should be able to find it on your bank’s website.
Other Common Fees
Minimum Balance Fees
If you are certain you can maintain the required balance, this isn’t a problem. If you have a sliver of doubt, keep looking.
Lost Card Fees
Your bank may charge a new fee for a lost card. It’s up to you if this is a deal breaker.
Foreign Transaction Fees
If you travel abroad frequently, be sure to talk to an employee at your bank about those fees and if there are ways to minimize them. This is important. Many banks will offer you no foreign transaction fees but you’ll have to maintain a certain balance with them or pay an annual fee for a linked credit card that offers this perk. Be sure to count the cost.
Hard Copy Statement Fees
Some banks will charge you a fee or a hard copy of your statement. It could be a basic monthly charge you are unaware you are paying for or you may be charged when you go to the bank and request one. I’ve seen fees on average of $6 per statement printout.
Account Closing Fees
You are the bank’s customer and if they want to keep your business, they may charge you if you close your account. Always ask if they do when you’re opening an account.
Wherever you choose to bank, at the very least, be sure to factor in the common charges that will impact your bottom line. Being aware and being smart can help you avoid some hefty bank fees.