Have you ever been scrolling through your bank account and saw a funny fee that you didn’t recognize? That happened to me a few years ago, when I was sifting through my online account, and there it was: a bank fee.
Bank fees can take a toll on your finances each month. Depending on your bank, you could be hit with monthly maintenance fees, overdraft fees, and ATM fees — all of which slowly take a toll each month on your finances.
Many big brick-and-mortar banks have monthly maintenance fees if your account is under a certain balance. From my research, I found that some of the top banks in the industry have fees that range from $12-$20+ per month.
In addition to monthly maintenance fees, it appears that overdraft fees are a huge issue for many people. In one study, the Consumer Financial Protection Bureau found that overdraft and non-sufficient funds accounted for 75 percent of total checking fees for the consumers surveyed, which amounted to about $250 per year. Think about what else you could do with $250.
If you’re feeling like you’re always getting hit up for various bank fees, here are some tips to stop the madness.
Play by the Rules
If you want to stop getting dinged with bank fees you have to play by your bank’s rules.
Usually, this means having a certain monthly account balance, having qualified direct deposits into your account and/or having a minimum amount of bill payments or debit card transactions to waive the fee.
If you can’t meet the requirements to keep your account free, you might be probably better off moving on to one of the strategies below.
Negotiate Lower Fees
If you like your bank and want to test out your negotiation skills, see if you can get your account fees waived.
You make money for your banks, so they might not want to see you go. If you are a long time customer, play up the fact that you have been with them for years. Be polite and persistent.
The real key here is just to ask. Ramit explains (with sample scripts) that you can get anything from monthly fees to overdraft fees waived, just by asking. Of course this doesn’t work every time, but it works 0% of the time when you don’t bother to ask.
The downfall of this technique is that they may waive your fees once, but to ultimately forego bank fees you have to play by their rules or switch banks.
Switch to An Online Bank
Ever since I realized I was getting hit with fees every single month, in various ways, I dumped my big bank and opted for an online bank.
It was a tough breakup at first since I was with that bank for ten years. But once I dumped the brick-and-mortar bank for an online bank, I knew I couldn’t go back.
At first I thought it would be weird to not have a place to go cash my checks, but with mobile technology being as great as it is, I have no trouble cashing checks. I also have a multitude of ATMs in my area, so whenever I need cash, I’m not at a loss with where to go.
Online banks cut their own costs by not having brick-and-mortar locations. Because of this, they can offer free checking and savings accounts with higher interest rates, and offer other perks like waiving overdraft fees.
Here are some of the best online banks with zero fees:
1. Capital One 360 (my personal favorite) – I love Capital One 360 because there are no monthly fees, no monthly minimums, or overdraft fees. They allow you to set up to 25 savings accounts that you can nickname and customize based on your goals. I had been saving with them for years, but ultimately switched to their checking account a few years ago, after I dumped my big bank.
2. Simple – Similar to Capital One 360, Simple has no monthly fees, no minimum balances, and no overdraft fees. They also have a Safe-to-Spend® feature that tells you how much you can really afford to spend, based on your transactions, bills, as well as transfers. Their design is sleek and mobile friendly.
3. Ally – Using an Ally checking account, you can ditch monthly fees, ATM fees, and overdraft fees. The big difference compared to the others? All out of network ATM fees are reimbursed. So if you are strapped for cash and go to the nearest ATM, you don’t have to worry about paying that pesky ATM fee.
Setting up an account with an online bank is easy. But closing your account? That’s a bit harder, but still shouldn’t take more than a few minutes.
In most cases, you should be able to walk into your local branch and tell them you want to close your account.
But for other big bank customers, you may have to send in a letter of request stating that you wish to close your account and let them know how you wish to receive your remaining balance.
Just don’t forget to change over any automatic payments you have set up.
Join a Credit Union Instead
If you still enjoy the luxury of talking to someone face-to-face, but don’t want all the bank fees, consider joining a local credit union.
Credit unions are a unique alternative to big banks as they are member-owned and more community based. They can often offer better rates and services to their members.
One of the local credit unions in Portland, Oregon, Advantis, offers a higher-than-normal APY at 1.75% and refunds all ATM fees — including ATM fees that are charged to you by other financial institutions.
If you are not sure what credit unions are near you, search for one here.
Monitor Fees Using Mint.com
Bank fees of all types can really eat up your budget. $12 here, $2 there. After a few years, you could be paying hundreds of dollars in bank fees!
If you want to know how much you are really spending in fees, sign up for Mint.com. They send you alerts when you get hit with a fee and show you all of your transactions in an easy-to-use setup.
I love being able to see all my income and expenses in one place and be alerted when I get hit with a fee.
Using these various tips, you can stop getting hit up for fees and spend your money where it matters.
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