Along with credit card fees, the charging of banking fees also upsets consumers, especially when these fees make no sense or come at opportune time. Thankfully, here are a few of the most annoying fees and how you can avoid them.
If you are like most consumers, you pay processing charges or membership fees for your bank or credit cards. Unfortunately, many consumers are actually paying much more than they think and the sad part is that they don’t even have to. This is not because banks are greedy or selfish; rather, according to Nessa Feddis, vice president and senior counsel at the American Bankers Association, banks continue to offer more and more services.
These services cost money: money for labor, development, technology, and materials. Putting this into perspective, Feddis says
We had limited services years 30 of [sic] 50 years ago—there were no debit cards, no ATMs, no online banking—so there were less banking fees.
Unfortunately, while this is true, banks are not necessarily forthcoming in regards to the new fees they do impose. A recent Pew Study, for example, shows that banks do not actually provide adequately clear policy and fee information and this makes it very hard for consumers to understand the fees they could potentially pay.
If these policies were easier to understand, consumers would be able to avoid many of these fees. If you want to save a little bit of money, take heed of the following list so that you can be aware of some of the most common fees that could be avoided with a little maneuvering:
The early account closure fee is, perhaps, the most commonly overlooked fee. Many banks, especially these days, use this policy to keep you as a customer for as long as possible. They will impose this charge on accounts that are closed quickly, much like a fee you could pay for mobile service before the end of the two year contract. While the fee could be as little as $25 (a steal when compared to the $250 early termination fee for mobile service), it is certainly something you can easily avoid by simply keeping your account open until the probationary period has expired.
The days of completely free checking might be over as many banks now charge a monthly maintenance charge as standard policy. This is another fee that can easily be avoided by maintaining a minimum balance in the account or by signing up for Direct Deposit. For example, you can avoid the $12 monthly maintenance fee with a Bank of American account by keeping a $750 balance.
Similarly, some banks will also charge you if your account balance is too low. Citibank, for example, charges $15 a month on EZ Checking accounts that keep a balance less than $6000. Feddis says that these fees are somewhat necessary because it costs a bank, on average, $300 per year to effectively service a checking account so implementing some of these banking fees ensures they are able to continue providing the service their customers demand.
The returned deposit fee is another fee that many people could easily avoid. This fee is assessed when a deposited check bounces. While you cannot control what other people do with their money you can control where you bank so if you are concerned this fee might affect you, consider switching to a smaller bank.
Finally, you should also know that many banks charge a foreign transaction fee when you use your debit card or do banking outside of the United States. Feddis explains:
There’s a greater potential for fraud with international transactions, so it costs the banks money to protect the consumer.
Avoiding this charge is as easy as finding a card that does not charge the fee.