Bank Fees

If You Can’t See Your Money, You’ll Spend More

Don’t let your bank profit from overdraft fees! In 2009, it’s estimated that banks earned $20 billion (yes, with a b) in overdraft fees Transactions from ATM machines, debit cards and reoccurring bill payment transactions are mainly responsible for record overdrafts These are invisible money transactions because you can’t see how much you’re spending or how much you have left in your account.

With the new Credit Card Act of 2009, things are changing.You will not be able to automatically overdraw your bank account.Instead, your transaction will be declined.But, that information may come too late to save you from difficulties with creditors and merchants.

The only way to prevent overdrafts is to keep good financial records You must know how much you have available at any given point Better yet – use cash According to studies, people who use actual cash spend 20% less than using other forms of payments That’s because they can see how much money they have left after making a purchase If you choose to use cash, use larger bills The larger the bill, the less likely you are to spend it It is so much easier to spend $5, $10 and $20 It doesn’t seem like much if you spend $20 in 5 different stores But if you have to break a $100 bill, you will have a true understanding of how much you’ve spent.

If you still want to use invisible money, and you aren’t going to track your account, you will have to opt-in with your bank to have your transactions pre-approved Remember that you will still have the fees associated with overdrawing your account.Those fees are typically over $35 for each transaction.

Spend wisely by avoiding fees Avoid fees by keeping good records or by using cash Overdraft fees are a total waste of your hard earned money.

How to Avoid Bank Fees

Banks make their money from the fees they charge you the customer Your goal is to not pay these fees, so that you keep more money in your account For 2010, I want you to avoid the following bank fees:

Checking account fees These fees can be avoided all together so check with your bank Typically banks will waive their fees if you have a savings account with the bank and they can link the two accounts together Some will ask you to have a deposit direct deposited to your checking account to avoid the fees Ask your banker and then do what they say to avoid this fee.

Uncollected Funds When you deposit a check, the check has to become available (the funds go from one bank account to yours), before you can use that money Uncollected funds occur when you attempt to use this money before it is available This will cause an uncollected funds fee to your account You need to check with the bank or to check online to see what your available funds balance is before using your money.

Non-Sufficient Funds This is when you write a check, withdraw money from the ATM or make a purchase with your debit card for more money than you have in your account If this happens the bank will charge you a fee for this transaction (you could incur this fee for each transaction that goes through your account) You need to know how much is in your bank account to avoid this fee.

All these fees are money makers for the bank and it’s to your best interest to avoid them and keep your money for you Keep good accurate records and you can eliminatethem.

Free Checking Accounts May Not Be Free

Question: Is my free checking really free? If so, how does the bank make money?

Great question Yes, there are free checking accounts as long as you meet the banks requirements These are typically a minimum balance in the account, direct deposit to the account or a certain number of debit card transactions It’s your responsibility to know what you can and can’t do according to your banks requirements so that you avoid these fees.

Banks make their money on the fees they charge their customers The checking account can be free, but the other optional costs are not These optional costs can include overdraft fees for either writing a check and/or using your debit card for more money than you have in your account, uncollected fees for using the money in your account before the deposited funds are available to use, stopping payment on a check that you have written, purchasing bank checks (money orders, certified checks) or using an ATM from a different bank All these fees add up.

There still could be more fees If your transaction is not honored, then the person or company you did the transaction with incurs fees that they may charge you too That ATM that you used from the different bank may change you a fee as well The most cost effective way to save your money, is to keep accurate records (checkbook records with a ledger or software) so that you know how much money is in your account at all times and to never run short on cash so that you have to use the most convenient ATM and incur a fee A little planning on your part can save you money.

How to Choose a Bank

How do you know if your bank is right for you? If you have been a subscriber to Quick Tips, then you know the first questions that must be answered: Is the bank an FDIC member and FDIC insured? The answer should be “yes.”

What other questions should you ask?

Location. Does the bank have branches or ATM machines that are close to your home, work, favorite stores, or activities? Remember that most banks charge a fee for using another bank’s ATM machines. You’ll also want to deposit any checks or cash quickly. Choose someplace close where it’s easy to make your transactions.

Fees. Do they charge you to have an account? If so, is there something you can do to lessen the fee or avoid it all together? Some banks waive their fees if you agree to direct deposit your paychecks, keep a minimum balance in your account, or have more than one linked account. You should be able to avoid any bank fees.

How to avoid bank fees. Banks have to make money to stay in business. One way they do this is by lending out money and charging interest. The other way is by charging fees.

You should be able to avoid fees with good record keeping. Keep your minimum balance and never use more money than you actually have (overdraft).

Every bank charges for overdrafts. It’s not only inconvenient for them, it’s actually illegal if you do it on purpose.

Keep accurate records with either a paper checkbook register, computer software, or handheld device. Your goal is to never have these fees charged to you.