Bank fees are often an unpleasant, unexpected surprise for consumers — and they can add up to a significant expense if you’re not paying attention. Failure to understand where your money is going puts you at risk of falling into debt or struggling to meet financial goals. Even small fees can take their toll on your finances, so try to avoid fees whenever you can. Here are a few tips for minimizing or avoiding unnecessary bank fees:
Open a Free Checking Account
Yes, free banking still exists, but there are often strings attached. Banks often require you to follow certain guidelines to take advantage of free maintenance services, but if you’re smart about your finances, it’s well worth the effort. For instance, directly depositing your paycheck into your checking account is not only a fast way to get paid, it’s also likely to keep your account fee-free. Maintenance fees may also be waived as an incentive when you add a savings account to your checking. Make sure you keep free by knowing the terms and conditions of the account so do your research before committing to anything.
Use Your Bank’s ATMs
It’s an unpleasant fact that most banks charge non-customers a fee to use their ATM to access cash. And that’s on top of the fee your own bank will load on. Avoid using your debit cards if you’re going to be charged a fee. If your own bank is miles away, consider paying for something at a grocery store with your debit card and use the cash-back function.
Spend Only What You Can Afford
If you’ve opted into overdraft protection, you may be charged a fee for spending more money than you have available in your account. These are often significant charges so make an effort to live with your means for the sake of practicing good financial habits — and save money. To ensure you don’t overspend, you need to check your account activity regularly, which can be as easy as quickly glancing at a summary on your phone or signing up for email or text alerts when your balance drops below a certain level or a transaction clears your account.
Avoid overdraft charges
When you write a check that bounces, you generally have to pay your bank’s overdraft fee and a fee to the business you wrote the check to. If the overdraft results in a late payment, you’ll also have to pony up the late payment fee, too. That late payment has a domino effect that leads to the credit card company that will increase the interest rate you pay.
Avoid credit card cash advances
Many credit card companies charge a higher percentage of interest for cash advances than they do for other transactions. And because the card company decides which balance it applies your payment to, it pays for the lower-interest transactions first, leaving the higher interest charges on the card longer.
Read those disclosures
A new fee disclosure is an indication that something has changed. Ignorance can be expensive, such as getting stuck with a fee after a check you deposit doesn’t clear and a $5 fee for failing to inform your bank that your address change. Open all mail from your bank and read it carefully so you don’t get surprised by a fee out of the blue for an item that was previously free.
Pay attention to the fine print
Overall, banks and credit card companies do a good job of disclosing information about accounts. However, some banks make it very difficult to learn about all of the fees and other important terms and conditions. In some cases, you may have to rife bank and legal speak to get to the nitty gritty information. Even though it’s a pain, take the time to wade through those documents to make sure you don’t miss any relevant details.
Use your apps
Mobile apps are all the rage and banking apps are heaven sent — and free. With mobile banking, you can perform several financial functions conveniently, securely and for free right from their mobile. That includes checking your account balance, reviewing recent transaction, transferring funds, bills paying, investments manage and locate bank ATMs.