How Banks are Taking Too Much Money From You
Banks have come to rely on fees as a way to generate revenue.
From charging you for going over your balance to simply having an account without a direct deposit, consumers are finding themselves increasingly nickeled and dimed by their banks.
As these fees become more common and more banks adopt them, they become harder to escape.
How you’re losing money:
1. Overdraft fees
Instead of simply denying a transaction on your checking account that goes over your balance, many banks charge an overdraft fee for the courtesy of allowing you to spend beyond your balance.
While it can be convenient if rent is due, it’s very upsetting when you have to pay nearly $30 for accidentally spending $2 over your limit.
2. Maintenance fees
Some banks charge fees on your checking and savings accounts if you don’t meet certain criteria, such as maintaining a minimum balance or having a direct deposit set up. Some of these are possible to get around but others are not.
3. ATM fees
If you are stuck somewhere without an ATM for your bank and need cash immediately, you can still withdraw funds but you’ll pay for it.
Using an out-of-network ATM can cost several dollars per transaction.
4. Returned deposit fees
Did someone write you a bad check? If so, expect your bank to remove the amount of the check — plus a fee for the inconvenience.
Yes, you get charged this fee even though you were not the one who wrote the bad check.
“If you are unhappy about
the fees, call customer support.”
Banks are also crimping our lifestyles with practices that keep our money out of our hands longer than necessary.
One of these tactics is holding checks, which is when a bank has a delay between when you deposit a check and when the actual funds are available in your account.
According to Investopedia, by law local checks can be held no more than two business days and non-local checks can be held no more than five business days.
Some banks are courteous and do it in less time, but some take the maximum time. If a bank takes longer, you have the right to report it to the Federal Reserve.
How to avoid these fees:
If you are unhappy about the fees you are experiencing from your bank, try calling customer support and asking for the fees to be removed.
Let them know you are planning to move your funds to another financial institution if they do not.
Many big banks used to occasionally waive fees for customers, but now that the fees are part of their bread and butter, many will not.
I recently learned this the hard way when a major bank started charging me $17 in monthly fees between two accounts. Despite being a loyal customer most of my life, they wouldn’t waive them.
The best way to do away with these fees is to leave big banks and join a credit union.
Banks are for-profit companies with a handsomely-paid board of directors and shareholders. Profit and the stock market are more important than happy customers.
However, credit unions are not-for-profit organizations technically owned by members, and the board of directors is made up of volunteers. Because of this radically different structure, credit unions by nature have far fewer fees than traditional banks.
As more customer service-oriented businesses, they are also more likely to waive a fee for you.
Photo source: mirror.co.uk