4 Ways To Avoid Bank Fees

Billshark agrees that banks have to make a profit in order to exist. But, not unlike airlines, they seem to find more and more ways to chip away at our cash with a fee here, a fee there, little fees everywhere. Which can add up quickly.

According to data from the Federal Deposit Insurance Corporation (FDIC), the U.S. banking sector reported $62.6 billion in profits for the second quarter of this year. This was a 4.1 percent increase over the same period last year.

Of course, much of that derives from interest income from loans, but those pesky fees on individual bank customers certainly didn’t hurt their bottom lines. The worst part is, many banks advertise their checking accounts as “free” but you have to do some research to uncover all the little “extras” they tack on.

So if you’d like to hang on to a little bit more of your money, here are four ways to avoid bank fees.

1. Monthly service fees

Your “free” account may charge a fee if your balance falls below a certain amount. This fee can run as high as $35 a month, depending on the bank or the type of account (most banks offer several types). To avoid this, ask about switching to a different type of account. Some accounts, for example, won’t charge a service (or “maintenance”) fee for customers who use direct deposit for their paychecks.

Alternatively, switch banks to one that doesn’t have this requirement. Credit unions often have fee-free accounts for their members because they are member-owned and operated. And look into banks that operate primarily or solely online. Many of those have truly free checking.

2. ATM fees

This is another big money-maker for banks. As if it costs them so much to electronically process transactions for non-customers. But still, they get away with charging anywhere from $2.50 to $5 for this service, and you could also end up paying your own bank to have the transaction recorded there.

There are really only two ways around this little rip-off: 1) use your own bank’s ATM exclusively, or, 2) withdraw needed cash at retail locations using your debit card.

And if your current bank doesn’t have numerous ATM locations convenient to you, consider switching banks.

3. Overdraft fees

These fees are huge: an average of $35 when you either make a withdrawal or write a check for more than you have in your account. This isn’t a one-time fee, either; if you’ve sent out several checks or have automatic payments that hit while your balance is negative, you’ll pay the fee for each transaction.

To avoid this, when you open your account decline the “service” that allows the bank to approve withdrawals or pay bills that come in when your account has insufficient funds.

Alternatively, set up overdraft protection that automatically pulls money from your savings account to cover any such withdrawals from your checking account. Some banks charge for this service—as much as $15—but that’s still better than a $35 overdraft fee.

If you rarely overdraw your account, get on the phone to the bank and politely ask to have the fee removed. If you don’t make it a habit to bounce checks, they’ll likely accommodate you. And be sure to have low-balance alerts sent your phone when your balance falls below a certain limit.

4. Paper statement fees

Many banks these days charge an average of $3 to send you a paper statement each month. The easy fix? Either view your statement online, or print it out yourself.

The important thing to remember is that you don’t have to let your bank nickel-and-dime you to death. If your current bank is costing you too much for the convenience of holding your money, consider switching. These days there are enough alternatives available that you shouldn’t have pay exorbitant fees to your bank.

It’s not just banks and airlines that hit you up for fees you can avoid. Your cable, Internet, and phone providers do, too. So let Billshark examine your bills for free and see how much money we can save you.