As mortgage concerns spread throughout the economy, many financial institutions are charging new fees - and increasing the level of existing charges - to lessen their exposure to volatile markets. As a consumer, it's prudent to know about these various fees and how to avoid at least some of them.
- ATM fees. Banks make billions each year on automated teller fees, and they can add up quickly for consumers. For example, two "foreign" withdrawals a week (from a bank that's not your own) could cost you over $300 a year in fees.
Generally speaking, you won't be charged for withdrawals from your own bank's ATM machine, but if you use another bank's automated teller, expect to be charged as much as three dollars per transaction.
Fortunately, this is an easy fee to avoid. Some financial institutions belong to networks that have agreed to waive ATM fees for their customers. Find out which banks or credit unions are tied to your network and frequent only those ATM machines.
Also, instead of making lots of little withdrawals to get your lattes and toothpaste, make less frequent larger withdrawals from your own bank's automated teller.
Of course this takes discipline, both up front and after the money's in your wallet. But ask yourself, "Do I really want to pay hundreds of dollars a year in ATM fees just to get my own money?"
- Overdraft fees. Banks will charge you if your account doesn't have sufficient funds to cover checks, ATM withdrawals, and electronic payments. These fees can really hurt.
For example, a bank might charge $25 for the first bounced check, $30 for the next three incidents, and $35 for checks that bounce thereafter. Some accounts have "courtesy overdraft" or "bounce protection" features, but often these come with a hefty price tag to cover overdrafts.
How can you avoid overdraft fees? Reconcile your bank balance with your check register every month. Record checks and online bill payments at the time of each transaction. Review your account balance during the month, either by phone or online. If you're not the world's greatest bookkeeper, keep extra cash as a cushion in your account as your own "overdraft protection."
Overdraft fees, ATM charges, and other fees can be avoided with a little forethought and discipline. If you'd like additional suggestions, give us a call.
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