5 Common Bank Fees You Can (and Should) Avoid
Most people have enough trouble keeping the balance they want in their bank accounts and could do without the added worry of having to pay unforeseen bank fees. Banks fine customers for many different items, some of which customers don’t even know about or expect. Although many of the fees are small, they can add up quickly. Even if you avoid most hidden fees and get hit with one $25 or $50 fee, that’s still money you could be using for something else.
The best way to avoid hidden fees is to know your bank’s policies as well as possible. The new account paperwork is enough to make most people feel overwhelmed, but many bank workers will take the time to talk to you about the different fees if you ask them. In the meantime, here are five fees to look out for — you should be able to avoid them with careful planning and by keeping track of your spending.
1. Maintenance fees
Depending on what type of account you have, you may be paying monthly maintenance fees. The fees are usually minimal, but even if you pay $10 per month in maintenance fees, that’s $120 per year. Most banks will have easy-to-meet requirements to avoid this fee, such as a minimum balance or by signing up for a certain amount of accounts (or specific types).
If you notice fees on your monthly statements that are labeled as maintenance fees or other fees you can’t explain, you might be paying a fee that you don’t need to pay. Contact your bank to determine how to have your fee waived. According to Time magazine, just complaining to your bank might be enough to get your fee waved; 10 percent of those surveyed were able to get an annual maintenance fee waived.
2. Fee for a lost card
If you lose your debit card or credit card, you might have to deal with more than just identity thieves: Banks will often charge a fee for replacing a debit card. In the state of New York, PNC Bank charges $7.50, Bank of America and Chase charge $5 for lost cards, and Bank of America charges $20 if you need your new card rushed to you (U.S. Bank charges $25 for this same service).
A Credit.com survey found that 44 percent of 1,000 respondents were able to have a checking account, credit card, or other financial fee waived after complaining about it, so your best bet is to talk to your bank. If this is the first time you lost your card, most bank staff will be understanding.
3. Fee for closing an account early
The easiest way to avoid this fee is to keep your account open as long as necessary to avoid the fee. Many people decide they dislike their banks or think they need to close their bank accounts if they move. If your account has a low minimum balance requirement, you can take the majority of your money out and leave the minimum in. Just like you would want to avoid fees that cell phone companies charge if you close your account early, the same is true of bank fees for closing your account too soon.
If you must close your account, try to do it in person and speak to the highest-level employee you can. You might be able to talk your way out of the fee. Many banks charge around $25, which might be worth it to you if you are really tired of your bank, but other banks charge more. With six of the 10 largest retail banks in America charging a fee for closing an account early, there’s a good chance you will face one.
4. Overdraft fees
Unlike many of the fees on this list, overdraft fees, as well as minimum balance fees, are really up to you. You need to be careful about your spending and pay attention to your balance. One easy way to do this is to sign up for an online bank account. With an online account, you can easily monitor your spending and your balance. And although automatic withdrawals might help you pay your bills on time, be careful not to schedule too many withdrawals too close together.
A 2008 FDIC overdraft study found that the median fee for automated overdraft usage was $27, and 24.6 percent of the surveyed banks also assessed fees on accounts that remained in negative balance status. Fees are still high at many banks, with overdraft fees on accounts costing customers $225 in fees per year as of 2013.
5. Foreign transaction fees
Many banks charge fees on purchases with a foreign bank. The transaction fee is usually a percentage of the purchase itself, but not always. The fee can also be called a foreign exchange fee. Not all banks charge this fee, but many do, and if you make an expensive purchase, the charge can be costly. Before you travel abroad — or even if you are staying in the U.S. but need to do business with a foreign bank — check up on foreign transaction fees. You can also research cards with no foreign transaction fees like ones offered by Capital One, Chase, and Citi, and many more through Visa and Mastercard.
Bank fees can also pop up in many other ways, including ATM fees, or through unsolicited (by you) credit report monitoring, so be sure to check your individual bank to find out as much as possible.