Increasingly, banks are finding ways to impose bigger and trickier fees on account holders.
Some of the sneakiest fees now and ways you can avoid them…
Self-defense: Check your balance before making the withdrawal if you are not certain there is enough money in your account.
Self-defense: Use only your own bank’s ATMs.
The banks claim they do this because large checks tend to be the most important, but consumer advocates contend that it is just a way to maximize fees. Bank of America, Citibank, HSBC, Wells Fargo and many other banks engage in the practice.
Example: Five checks you wrote reach your bank on a given day — four checks for small items followed by a $1,600 mortgage payment. If there is only $1,500 in your account, only the final check — the big mortgage payment — should bounce. Instead, your bank processes the large mortgage payment first, which means that all five checks will bounce. Rather than a $30 or $40 overdraft fee and one upset check recipient, you now face $150 to $200 in overdraft fees and five perturbed check recipients.
Self-defense: Avoid writing many checks or making several debit card purchases in a short period if you are not 100% certain that there will be enough money in your account to cover all of them.
Self-defense: Do not accept checks as payment unless you are confident that you can trust the payer.
Self-defense: Close any unnecessary accounts.
Self-defense: Ask about account closing fees before you open the account. Don’t open an account at a bank that charges such a fee if you expect to leave the region or close the account for another reason anytime soon.
Self-defense: Give cash or a check — or a retailer gift card — rather than a bank gift card.
Some banks even charge a fee for certain ATM services, such as requesting a “mini-statement” that summarizes recent transactions.
Self-defense: Ask your bank if your account has a limit on the number of free teller visits or calls. If it does, do as much banking as possible through ATMs or on-line.
Ask to have any teller or phone fee waived when your call or visit is about a bank error, involves opening an account or is because the bank’s ATM is out of service. You also may avoid these fees if you maintain a certain balance in some accounts.
Banks impose PIN fees to encourage customers to sign for purchases, because banks can charge retailers higher fees when they do. Trouble is, many cardholders don’t even know that PIN fees exist.
Self-defense: Try to use credit cards rather than a debit card. If you do use a debit card, check whether your bank imposes a fee when you enter a PIN. Consider switching banks if it does.
HOW TO AVOID FEES
Many bank customers learn that fees exist only when charges appear on their account statements — if they bother to read their statements at all. Banks are required to give new customers a “Truth in Savings Disclosure” statement detailing all of their fees and to notify customers in writing when policies change, but few customers read the fine print of bank literature. All bank customers should request a copy of the fee-disclosure statement for their accounts.
Banks once waived fees upon request for good customers, but this is less common now. At many banks, low-level employees no longer even have the right to waive fees, and the managers who do are increasingly unwilling to be lenient — though it is still worth asking to have questionable fees waived when they appear on your statement.
Credit unions tend to impose the fewest and lowest fees, followed by local community banks. Large bank chains typically have the greatest number of big fees — though they also have extensive ATM networks, which can at least help customers avoid paying out-of-network ATM fees.