It seems like banks are always finding new ways to charge their customers fees associated with their checking and savings accounts.
The average person now spends around $150 on service fees each year. This is extremely frustrating, especially because it’s your hard earned money that’s at the root of the charges.
However, there are ways you can cut down on these bank fees and keep a little extra cash. It just takes educating yourself and making some small adjustments.
To help you out, we’re going over eight tips for minimizing bank charges.
1. Account Maintenance Fees
Banks have to make money to stay in business. They do this by providing loans and collecting interest rates.
However, when interest rates are low, they need to find other ways to earn money. Hence, maintenance charges.
Also referred to as a service fee, this monthly charge doesn’t seem to have a purpose. It’s simply a fee the bank charges you in order to maintain your account.
However, there are a few ways you can avoid this.
Some banks will waive the service fee if you make at least two direct deposits a month. They may also do away with it if your monthly deposit amount is high enough.
Finally, there’s a chance you can avoid the fee by using your debit card a certain number of times per month.
2. Opt Out of Overdraft Protection
Banks will try to get you to sign up for overdraft protection. If you make a transaction without enough funds in your account, this service covers you so the transaction doesn’t get declined. However, when this happens, the bank charges a fee.
To avoid incurring this charge, simply opt out of overdraft protection. Keep in mind that if you have insufficient funds, any transaction you make will get declined.
The best way to avoid this is to set up a text message alert that tells you when your account goes below a certain amount. Most banks offer this now.
In addition, simply keeping a close eye on your account balance will help you avoid an embarrassing situation.
3. Only Use Your Bank’s ATM
It seems silly to pay a fee in order to access your own money at an ATM. However, if you use an ATM that belongs to another bank or network, you’ll pay a fee. In fact, you may incur a fee from the ATM machine and your own bank.
The best way to avoid paying this is to only use your bank’s ATMs. Make sure you know where they’re located in your city. Many bank apps have a feature that will help you locate them.
Another tip is to get cash back at a grocery store. Make a small purchase with your debit card and ask for cash back while checking out.
4. Go Paperless
Many banks now charge a fee for mailing out physical statements. Fortunately, all you have to do is sign up for paperless billing and you won’t have to worry about it.
If you like to receive physical statements in the mail, there’s probably nothing you can do about the charges. It may be time to give online banking a try.
Going paperless is actually much quicker and more efficient. You have instant access to your account balance anytime.
Plus, going paperless is better for the environment.
5. Savings Account Activity Fees
Many banks charge you if you take money out of savings too many times in one month. Some also require you to keep a certain amount of money in your savings account. Once you go under that amount you’ll incur a fee.
The best way to avoid this is to plan ahead each month. If you know you’ll need to transfer money from savings to checking, determine your budget so you will only need to make one transfer.
If you need to transfer money back into your savings account, but know you’ll get charged if you do, wait until next month to make the transfer.
Another tip is to physically visit the bank to make your transactions. Most banks won’t charge a fee if you visit a branch personally.
6. Avoiding Fees for Foreign Transactions
If you travel to a foreign country, the currency transfer on debit card transactions can result in a hefty fee. These foreign transaction charges can add up quickly, so you need to take measures to avoid them.
The best way to get out of these charges is to not use your debit card. This means you’ll need to budget for your trip and use cash.
However, if you’re moving around to different locations, carrying a lot of cash is risky. The last thing you want is for all your vacation money to get stolen.
If you’re worried about this, look into getting a credit card that doesn’t charge a fee for transactions made aboard. Just remember to pay it off quickly.
7. Watch Out for the Minimum Balance Fee
If you’re struggling to make ends meet, this fee is your worst nightmare. Your bank may charge you if your checking account drops below a certain amount.
If keeping enough money in your account is a problem, ask your bank what you can do to have them waive the fee. Many banks will do this if you start making direct deposits.
It’s also common for banks to waive the fee if you set up a savings account or start using their online banking platform.
8. Consider a Credit Union or Online Bank
If you can’t seem to get away from your bank’s hidden fees, consider closing your account and working with an online bank or credit union. They’re typically much less expensive.
Keep in mind that if you use an online bank, there won’t be any brick and mortar locations you can visit. You do everything online.
Credit unions have a reputation for offering free checking accounts with minimal fees. Just make sure you do your research before you choose one to work with.
Minimize Your Bank Fees and Keep More of Your Cash
If you feel like you’re getting taken advantage of by pointless bank fees, you’re not alone. These charges are now a fact of life.
However, by using the tips discussed above, you can minimize your fees and keep more money in your account.
Check out more articles on smart ways to save money any way you can.