How to avoid banking fees

For over a century, everyone has wanted a safe and easy place to store their money. The only problem is that in recent years, banks have decided to make their profits by charging customers fees for anything they can possibly imagine. We will look at some of the most common fees and how to avoid them so you keep as much of your money as possible.

One of the most common fees that many customers face is the monthly service fee for having an account. Basically, the bank is trying to act like a landlord and is charging you for rent to hold your money with them. There are many ways to get around this. Obviously, if your account has enough money daily (and they average it out), you aren’t charged a fee. Another option is to use direct deposit. If your employer offers it, it can save you money. The banks like direct deposit and encourage its use by offering you a financial incentive. Direct deposit especially helps you at the weekend. You deposit your money in person on Friday and have to wait until Saturday or even Monday (or longer on holidays). With direct deposit, your money usually available right away on Friday.

Another type of fee is for using automated teller machines (ATMs). These fees are challenging because there aren’t usually multiple ATMs in a location so you have to use the one that’s available. Sometimes, that might be a competitor, which means they’ll charge you a higher fee since the machine is one of their own. The best thing to do is either hunt for one of your own bank’s ATMs or just pay the fee (which is deducted from your account).

One really annoying fee and probably the one everyone tries the hardest to avoid is the overdraft fee. Most people would advise keeping enough money in your account to avoid running into that dilemma, but it does happen sometimes that, even when you’re careful managing your money, your account hits zero before your next deposit. One great way to avoid this is to have a savings account and to use your bank’s app or website (assuming they have one). If you’re at a store or restaurant and your purchase on your check card is declined, you just open the app or log onto the website and transfer enough from your savings to your checking account to cover the transaction, which happens instantly, and have them run the card again, which will now allow the transaction).

One way people get into trouble with overdrafts is by having payments automatically deducted from their account, which can cause problems if you’re carefully monitoring your account. If you need to have recurring payments billed to a card because it’s required by a service provider (like a newspaper or a health club), try to have it billed to a credit card so it doesn’t affect your banking account.

It’s tough to avoid fees from a bank (you may be able to get a reversal of an overdraft fee as long as you’re not a habitual check bouncer), but do try to use the technology that’s available to keep yourself in control of your money. Your money is yours and you should get to keep as much of it as possible.

The next issue we will look at is credit.

Arthur Johnson is a volunteer writer focusing on finance and economic issues.

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