I refuse to pay bank fees. Talk about paying something for nothing! Yet, I’ll bet a huge percentage of bank customers regularly pay fees. And I’ll bet they’re often also the ones who can least afford to. (eg. A dear friend of mine pays $25/month for the privilege of having a checking account. Yet she rarely has more than a couple hundred dollars in it. She’s flushing money she can’t afford to lose down the toilet.)
Here’s some advice regarding bank accounts that I will add to and repost as I come up with new ideas:
1. meet your banker. Introduce yourself; explain what kind of accounts you have/need; find out what kind of benefits you’re missing out on; get his/her card so that you can contact him/her, if necessary. (eg. My computer died last year and, in the confusion, I accumulated $33 in overdraft fees. Because I had a relationship with my banker and, because I try not to abuse his kindness, I was able to plead my case in an email and he reversed the charges.)
2. always open and go through your bank statement (whether you receive it in the mail or online).
3. balance your checkbook, preferably to the penny. (Over the years I have developed a system that, while somewhat OCD, is a huge help when balancing my checkbook. I may embarrass myself and share it one of these days.)
4. read any notices or news printed on your bank statement. This is how you find out that they are going to charge you $3/mo for receiving a paper copy or that they are now charging for the overdraft protection you’ve had for years for free.
5. save your bank statements, all of the pages, for at least a year. If you apply for a mortgage or refinance an existing one, you will be asked to provide at least two months of statements. I keep them in case I need to research something that has happened over the course of the year, usually when I’m preparing our taxes.
6. look for fees that you are being charged, legitimately or otherwise. And, yes, banks DO make mistakes. (eg. my bank charged me $15.51 for a negative collected balance* when they shouldn’t have. My statements show a daily balance summary and my account was never negative. I emailed my banker, he looked into it, agreed that it was a mistake, and reversed the fee.)
7. if you are paying ATM fees STOP!! Know where your in-network ATMs are. If they aren’t convenient enough, consider finding another bank.The only time I will ever pay an ATM fee is if I’m out of the city. And, in that case, I make sure to take out enough money so that I don’t have to pay ATM fees multiple times. The bank charges you the same amount to take out $20 as it does to take out $200.
8. consider checking your banking activity online every day or so to see that balances are good and to look for unusual activity.
9. set up alerts to email or text you when your balance gets low or every time a payment is being sent.
10. use your bank’s online bill pay.** Hopefully, it is free and, if not, check around to see if there’s another bank, convenient to where you live, that offers this service for free.
11. don’t bounce checks. Talk about a no brainer. The bank fees for bouncing a check are astronomical! And there may be costs charged you by the party to whom the check was made out to. For example, if a check from a renter bounces we are charged $19, which we pass on to them. Their bank probably charges something closer to $32, making the total for one bounced check upwards of $50!!! If you follow my advice in 3, 8 and 9 above, you will be much less likely to ever bounce a check.
*A common reason for getting charged for a “negative collected balance” is when you deposit a check and, before that check has actually funded, you withdraw more money than is, technically, available. This happens at one of my banks and it drives me nuts (which is why I’m shifting my activity over to another bank.) This bank shows an “available” balance before deposits are actually funded. The other bank does not do this. If the deposit hasn’t funded, you can’t take it out. (At least I’m pretty sure.)
**Here’s my hierarchy of payment:
1. pay by credit card if the company does NOT charge you a fee to do so. I want MILES! I use autopay for recurring charges.
2. pay by check via my bank’s online bill pay. You don’t have to pay for a stamp, and it creates a better audit trail. Also, my bank guarantees that the check will get there by the scheduled date and they will refund any late charges incurred if it doesn’t. For recurring charges, like our mortgage payment and HOA dues, I set this up to occur automatically.
3. pay by regular check out of my checkbook.
4. pay by cash, something I rarely, almost never, do!