Tips to Avoid Excessive Fees at Banks
Bank fees, from overdraft fees to a small charge for every check written, can add up quickly, especially if you frequently use fee-based services. Understand the fee structure at your bank to reduce your costs and decide if it is time to switch to another financial institution to save you money.
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Read Fine Print
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Read the details of your account, as each bank has different terms and fees. Review the fees associated with regular account functions, such as writing checks, using a debit card, withdrawing money from an ATM, using online bill-payment features, getting a copy of an old check and general account maintenance. In some cases, your bank charges you if the account balance drops below a certain minimum level. Beware of penalty fees for bouncing a check, using another bank's ATM or replacing a lost debit card.
Track Spending
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Tracking spending to avoid fees due to insufficient funds; these fees are often $30 or more. If you bounce a check, you may face a fee from the merchant to whom you wrote it. Banks offer overdraft protection that either charges the amount to a line of credit or draws from your bank account. This service comes with a fee, but it is generally less than the fee for insufficient funds. By keeping track of your account's balance and transactions, you ensure that your balance does not drop too low and thus avoid either type of fee; neither will you be penalized if your account drops below a certain level. Build a monetary buffer so that you do not get too close to the cutoff.
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Review Statements
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Fees are sometimes inaccurately assessed to your account. Review your statement every month for accuracy in reflecting your transactions for that period. Look for unexplained fee added by the bank; call to clarify why the fee was charged. Watch for any fraudulent charges or mistakes that the bank makes in applying funds or debiting payments from your account. You may end up with a fee for insufficient funds or another type of fee if the incorrect charges cause your balance to drop too low.
Shop Around
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If your bank charges a large number of fees, consider shopping around for a new financial institution. Other local banks are likely to vary slightly in their fee structures. Review your account usage to get an idea of how many checks you write and how many ATM withdrawals you make in a month to estimate the fees you would pay at other banks. Virtual banks that operate completely online are able to offer lower fees and charges. Credit unions generally offer lower fees and rates for their services than banks do.
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