8 Simple Tips to Avoid Unwanted Bank Fees

by Susan Paige on March 26, 2020 · 0 comments

Fed of getting caught out by pesky bank fees? The good news is that most bank fees can be avoided, with some preparation and a little know-how. Check out these eight tips below to help you keep more of your hard-earned money in your pocket, not your bank’s.

1. Consider Opting Out of Overdraft Coverage

The average overdraft fee is around $35. Some banks will charge you multiple overdraft fees on the same day, so if you don’t know that you’ve run out of money, you can end up in big trouble.

One way to avoid overdraft fees is to opt-out of overdraft coverage with your bank. This means that if you don’t have enough funds when attempting to make a one-time purchase or ATM withdrawal, your transaction will be declined (and you won’t be charged). However, an insufficient funds fee may apply for other transaction types.

You can also see if your bank offers the type of overdraft protection where you can transfer money from a linked savings account to your checking account in the event of an overdraft. A transfer fee will apply but is likely to be much cheaper than a standard overdraft fee. You can also consider using a borrow money app if you know you’re about to overdraw.

2. Keep a Minimum Balance in Your Checking Account

Many banks charge a monthly service fee for managing your checking account – on average this equates to over $13.47 per month (and $162 per year). 

It’s worth asking your bank if they’d waive their maintenance fee if you were to meet certain conditions like using your debit card on a regular basis, or by keeping a minimum balance in your account. Many banks are happy to waive their maintenance fee if you can do this.

3. Get a Fee-free Checking Account

Another way to make sure you avoid unwanted maintenance fees and overdraft charges is to apply for a fee-free checking account. There are plenty to choose from, many of which are administered online. 

An example is the Capital One 360 Checking Account. It’s free to open and keep the account, and no maintenance or overdraft fees apply. Make sure to read the small print before you apply for any new bank account.

4. Use Networked or Fee-free ATMs

Using an out-of-network ATM in the U.S. could set you back anywhere between $3.00 and $6.00, with the average fee being $4.72 in 2019. Being mindful of where you go to draw out cash will help you reduce fees of this type.

Use your own bank’s network of ATMs where possible. You can also check which debit card network your bank uses (e.g. Allpoint, Star or TransFund). Simply ask your bank this question, or check the back of your debit card. Your bank may also provide an ATM locator tool that you can make use of too.

5. Go Paperless

Asking to receive electronic bank statements is not just good for the environment, it’s better for your wallet too. Paper statements can cost between $2 and $3 at most banks, although Bank of America charges a hefty $5.

6. Use a Travel Rewards Credit Card for Overseas Purchases

Foreign transaction fees can occur when you make a purchase using your debit card while abroad. These unwanted fees can amount to between 1% and 3% of your transaction. If you’re planning to go abroad, check the small print about your debit card and see whether charges apply. If they do, call your bank and see if they offer a fee-free debit or credit card that you could use instead.

Alternatively, you could use a travel rewards card like the Capital One Venture Rewards Credit Card. It doesn’t charge any foreign transaction fees and helps you to build up ‘miles’ that you can spend on future travel. It’s fee-free for the first year, but then $95 annually thereafter.

7. Keep a Close Eye on Your Debit Card

If your debit card is lost or stolen, you run the risk of multiple unwanted charges. If you don’t contact your bank quickly enough, someone could use your card without authorization to take funds out of your bank. 

If unauthorized transactions are made to your account before you report the situation, you could end up facing a charge of up to $50 (providing you report it within two business days – more if you leave it longer).

So, notify your bank as quickly as possible if you think your card is lost or stolen so you can get your card frozen or canceled. Your bank may also issue a card replacement fee when sending out another card to you.

8. Try to Avoid Bad Checks

If someone pays you with a check, and that check bounces, you could be landed with a Returned Deposited Item fee. What you’ll be charged varies on the bank you’re with. Santander charges $15 for a domestic returned deposit, Bank of America charges $12 and Capital One charges $10.

It’s not easy to spot whether someone’s going to give you a bad check. Look out for low-numbered checks, or protect yourself by only accepting cash or a cashier’s check instead.

Avoiding Unwanted Bank Fees

This article covers eight ways you can get around some of the most common fees charged by banks. In summary, consider opting out of overdraft coverage, using only networked ATMs, keeping a minimum balance in your account, or switching to a fee-free account.

Going paperless, avoiding bad checks, keeping your debit card safe and being mindful of foreign transaction fees can also help you to keep more money in your pocket.

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