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Tags: finance, personal finance, outrageous bank fees add up
 Have you ever used your ATM card to take money from an ATM machine that is not owned by your financial institution? I have, and I’m sure that you have as well. And when you do you get charged an ATM fee of between $1.50 to $2.50 per transaction not only by the institution that owns the machine but also by your own that provided you with your ATM card.
These charges are just one of many that are putting a bite on your savings and the thing is these outrageous bank fees add up over the long term. How big is it exactly? According to Bob Hammer, CEO of R.K Hammer, a banking industry advisory firm, bank fees account for over 53 percent of the banking industry’s income in 2008.
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Credit Card penalties are at $19 billion and are one of the most lucrative bank fees charged. Cash advances are also taking a big bite out of your wallet. The amount charged for such transactions have risen from 2 percent with a $2 minimum and a $10 maximum to around 3 percent with minimums ranging from $5 up to $15 with no maximum.
If you have a checking account, that’s another lucrative area for banks to collect bank fees from. Overdraft charges are on the rise. The typical bounced check fee is around $29 and many financial institutions have a multi-tiered system wherein the next overdraft would go up to around $33 and so on.
Other bank fees included with your checking account include stop-payment and returned-deposit charges. A typical stop-payment charge is $25 while returned-deposit charges start at $10. And that’s on top of any overdraft charge that may be added. And since it is a checking account, there is also a minimum deposit amount required.
Should you go below this threshold you can get hit with a $25 penalty for every month it goes below the minimum required. And if you think that your bank’s not as courteous as before then you may be chagrined to know that banks may also charge bank fees for every transaction you do with their tellers and staff.
What this means is, depending on the institution, you may pay for the privilege of talking to bank tellers, in person or on the phone, just to inquire about your account, the services they offer, or to order new check books. Fortunately, there are alternatives out there that just needs a little of your time and patience.
Look into credit unions and community banks. Since they are more community oriented their fee schedule are often easier to swallow. For example, they may not have cash advance charges. And for the most part their bank fees are lower than in big banking institutions. And if you’re opening a checking account, look for one with a broad network of ATMs available.
Don’t just look at big banks, local institutions and credit unions often form alliances that allow customers to use alliance member ATMs at no charge. Also don’t even bother with interest bearing checking accounts. Yes it’s good to have interest but it’s so minimal that it won’t even pay for the penalty if you go below the minimum deposit required.
Just pick a regular no interest account that will have a lower deposit required. And to avoid bounced check or overdraft charges balance your checking account on a regular basis so you know if you have money to write a check out with or not. However, if you’re having difficulty with this there is always overdraft protection wherein your savings account is used to take care of the overdraft.
There may be a fee for this service but it’s lower than the penalty you’ll be paying. Talk with your banking institution as many will waive the charges if you ask them nicely. Bank fees aren’t that bad as long as they are reasonable.
About the author
The author of this article Rick Goldfeller is a successful underground Financial Analyst who has been advising and coaching individuals for many years. Rick recently published a book on how to manage your money and attract Wealth and Financial Freedom. More info on his Finance Planning course is available HERE.
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