Avoiding bank fees

While standing in line at the grocery store, I couldn’t help but overhear two ladies talking about bank fees. The complaining party mentioned that she felt that the fees for basic checking and savings accounts are exorbitant, unfair and often hidden. This confused me, because I’ve been with many different banks over the years and have never experienced this – I’ve never even paid monthly fees for my account.

Certainly, I’ve paid other fees, such as overdraft or foreign ATM fees, but these are completely avoidable, and not at all a secret. I incurred these fees because I spent more than I had in my account or used an ATM outside of my bank network and paid for the convenience.

Free checking and savings accounts exist – they’re everywhere, including online banks, which you can access from anywhere, so if someone is paying a fee for the privilege of giving their money to a bank (which then turns around and lends out that money to make more money), I would tell them to set a timer for 30 minutes and do a simple web search to see how many banks and credit unions they can find that offer free checking & savings accounts. Nerd Wallet compiled a list of 10!

As for overdraft charges, these are easy to avoid…don’t spend more than is in your account! For those who would say, “I need to feed my children,” think about this; now you have $30 less to feed them, because the bank is going to charge you for using their money! It wasn’t yours to take! A better idea is to keep a budget, so you know how much money you’re working with. If you still come up short, try a food bank or church, call 211, or visit 211.org or other community resources that can help. Don’t get caught in the vicious cycle of paying fees because you don’t have enough money – this puts you deeper into the hole.

As for ATM fees, find a bank that refunds those fees or plan better for your cash needs. Of course, there might be a time when it just makes more sense to use the foreign ATM and incur the fee. Fine! Accept it for the convenience it is. But don’t tell me it’s unavoidable! How often do you really need cash anyway? And if you know you’re going to need it, plan ahead so you can get it from your bank’s ATM.

Then there are interest bearing checking accounts. As a budget coach, it would warm my heart if people would take a little time to do the math before they sign up for one! I know someone who got taken by the low $5 per month charge for this great checking account that pays interest! The problem – the amount of money they average in their checking account will only garner about 25 cents in interest per month! DO THE MATH!!!!!

Bank fees are easily avoided by paying attention to your money, planning ahead and reading the fine print.

Think it through.

Disagree? Let me know! Bobbi@centsablechat.com