Whether it's because of new rules regarding credit card swipe fees or tighter regulations for maintaining different types of accounts, banks across the country are increasing fees for various transactions--and even longstanding or preferred banking customers are feeling the pinch. Certain types of accounts are simply unprofitable for most banks, forcing the institution to find new ways to increase its income. Imposing certain fees and surcharges can help to compensate for this lost income, but savvy consumers can take steps to avoid many of these fees.
Consider these tips to keep your banking costs as low as possible:
1. Shop around for better rates. Even if you've been a longtime customer, don't be afraid to shop around for a bank with better service and better rates. If you're with a corporate bank, consider making a switch to a local bank that can offer competitive rates and possibly even better customer service. Credit unions can be an attractive alternative to corporate banks and many offer lower fees.
2. Maintain a high balance. Many banks impose a minimum balance fee. If you can't realistically carry the minimum balance for an extended period of time, talk to a personal banker to find out what other banking products may be a better fit for you. Minimum balance fees can be as much as $15 or more and charged to your account every month until the minimum requirement is met.
3. Switch to an online bank. Unless you need access to a branch in your city or town, or want face-to-face interaction with a personal banker on a regular basis, you may fare better with banking entirely online. Online banks can offer attractive rates on savings and deposit accounts and also make it easier to organize your finances. While many brick-and-mortar banks offer online and mobile banking services, you may still be subject to high fees, so it's worth looking into other options.
4. Don't close accounts too early. If you opened a bank account to earn some extra money with a promotional offer or opened multiple accounts to better manage your money, make sure you're not changing your mind too soon or you'll be subject to account closure fees. Many banks now charge an account closure fee to anyone who closes their account within 180 days (or another stated period). Review the fine print of your banking agreement and any terms and conditions related to a special offer where you earned a bonus in exchange for opening your account.
5. Watch for foreign transaction fees. Some banks will impose a fee when a transaction is processed overseas. For example, if you are purchasing something from a U.K. retail store and you use your bank credit card to authorize the transaction, your bank can charge a percentage of the transaction as a foreign transaction fee. These fees can prove especially costly for high-end transactions.
6. Search for free checking account options. Checking account fees are on the rise--but they can be avoided. A number of banks are staying competitive by offering free checking accounts ,and these financial institutions may be a better match for you.
7. Review bank notices regularly. Don't get into the habit of immediately tossing those notices and addendums that come in the mail into the trash. Make sure you read them carefully to see if there are any changes to a previously free account or new transaction fees. Banks will give you a warning when they are about to impose a new fee, so you'll have some time to switch banks or switch banks if needed.
Find the best checking accounts with the lowest fees and more financial tips from Sabah Karimi at Wise Bread, winner of multiple Best of the Web awards.
- Banking & Budgeting