U.S. consumers are right to feel ripped off by banking fees. U.K. consumers enjoy free banking with charges only imposed for breaching terms, illustrating that a large swathe of bank charges are nothing more than an unnecessary evil.
Bank customers should be aware that charges are likely to increase further when amendments to the Dodd-Frank financial regulation law come into effect on Oct.1 2011 which will reduce the amount banks are allowed to charge in interchange fees when customers swipe their debit cards. Naturally the banks will need to make up these lost fees with other charges.
If customers are aware of the specific charges levied on their bank accounts then they can identify the ones that can be avoided, or vote with their feet and switch banks. To understand the bank fees and how to avoid them customers can search online for a list of charges imposed by their bank.
The most common avoidable charge is the monthly maintenance fee which is totally unnecessary and can add up to a substantial amount over the course of a year. Many banks waive this fee dependent upon the customer meeting certain requirements that are typically: maintaining a set daily balance of X amount of dollars; setting up direct deposits; making a set number of transactions per month.
However customers who feel inconvenienced by the need to maintain a daily balance of $1,500 or other amount, can move accounts to another bank that offers free checking accounts. Internet banks often offer better terms with fee free banking.
ATM fees are another common charge that should be avoided as a costly nuisance. Although banks do not charge their customers for using their own ATM’s they will often charge the customer for using an out of network machine. Additionally the out of network ATM provider will levy a fee.
If these are fees that you regularly incur it is worth switching to a bank that offers to refund any surcharges incurred. The Incredible Bank guarantees no ATM charges ever, whilst many other banks offer to refund either all surcharges, or surcharges to a set monetary limit each month.
Overdraft protection fees are unnecessary and must be opted in for by the customer. There is no need to pay this protection fee. A careful eye on your balance to ensure the account does not go overdrawn prevents charges.
Many consumers do go overdrawn each month simply due to the fees imposed on their accounts by the banks playing havoc with calculations. It pays to always be aware of any possible charges the bank may levy. Even something as simple as a $2 charge for a printed copy statement may tip you over the edge if not allowed for.
Astute consumers not only avoid paying bank charges but they seek out checking accounts that pay interest on the balance. Instead of allowing your bank to profit at your expense, make a review of your current bank’s charges and which ones you actually pay. If unavoidable charges remain because of a condition such as maintaining a too high daily balance for your budget, then comparison shop between other banks and make the switch.