7 Ways to Protect Yourself From Rising Bank Fees
Banking fees in the U.S. have climbed steadily over the last 15 to 16 years. Unfortunately for consumers, there’s no indication this trend could end any time soon.
ATM fees were on the rise in 2013, and banking customers pay an estimated $32 billion every year in overdraft fees, separating consumers from their hard-earned money.
Former banker Nick Clements, who previously worked for Citigroup (NYSE: C), is now fighting fee hikes and empowering consumers to combat rising banking fees. Unlike other consumer activists, Nick Clements is focused on increasing the power of the consumer rather than campaigning for tighter regulations on the banks.
In many ways, he is echoing the sentiments of Natalie Cooper of Banking Sense, who said in a recent interview, “Consumers today aren’t getting the most out of their mobile apps and banking experience. It’s an extremely competitive market, so banks are offering some great deals, but a lot of consumers aren’t aware of the savings and rewards available to them. Through research and awareness, consumers can protect more of their hard-earned money from banking fees.”
The reality is that many consumers switch banks because of high fees or poor customer service, only to encounter similar or worse charges at competing banks. A smart consumer should consider the following tips to avoid incurring unnecessary banking fees:
How to Get Rid of Bank Fees
1. Know the Bank’s Rules
Have you recently switched banks? Don’t assume your new bank has the same rules as your last one. It’s critical to read the fine print on banking contracts and stay updated on any policy changes. Simply knowing the minimum monthly balance can help prevent fines down the road. Each bank has different parameters; it’s critical that consumers be familiar with their bank’s terms.
2. Go Online
Banks are competing in the digital boom, as 69 million Americans currently use mobile apps or online banking to manage their financial accounts. In fact, banks will waive some fees when consumers complete transactions online, as a way to encourage online banking. This can be very convenient for customers, and it contributes to the banks’ efforts to “go green” and eliminate unnecessary paper consumption. Direct deposits and paperless statements benefit banks, so many of them offer rewards if you use these services.
3. Watch App Usage
Unless you have an unlimited data package for your phone, keep an eye on how much you access your banking app from your mobile device. While excessive usage won’t result in a fee directly from your bank, it might well increase your phone bill, which certainly costs you money.
4. Understand ATM/Overdraft Fees
The average ATM surcharge in the United States climbed to around $2.60, though some banks waive the fee if you use the ATM on bank premises. Even if your bank has a lower surcharge, these fees can add up quickly, especially if you visit the ATM often. Keep track of your account balance and stay aware of any potential overdraft fees.
5. Limit Bank Visits and Transactions Whenever Possible
More and more banks are charging fees for banking with a teller or exceeding a minimal number of transactions per month. To limit your bank visits effectively, it’s useful to plan your transactions in advance instead of going in on a whim. Not only does this reduce the chance of potential fees, but it also helps you stay on top of your finances. Planning in advance is key to achieving a reasonable budget and responsible spending.
6. Clarify What “Free” Means and Read Any Disclosures
Many banks offer “free” services that aren’t really free or have extensive requirements. For instance, a bank might offer a no-fee checking account, but only if you meet a minimum balance requirement. Failure to follow this rule results in a fee that negates the “free” nature of the account. Try to be aware of how your bank defines “free” and adhere to the stated restrictions.
7. Understand Your Bank’s Strengths
Just like any other business, banks target specific consumers and set their fees accordingly. Does your bank specialize in loans, commercial accounts, personal accounts or something else? You don’t have to use a single bank for your every need. Make yourself familiar with the strengths of each bank with whom you do business.
Are you getting the most out of your bank? Let us know in the comments below.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.