Just the mention of bank fees is enough to make most people’s blood boil. It seems like they’re everywhere. No matter what we do, we’ll probably incur a bank fee at some point in our lives. After all, that’s how banks make most of their money.
Thankfully, it doesn’t have to be that way. With a little planning and knowledge, you can avoid those nasty bank fees forever.
Be Selective: Use Online Only Banks
First off, avoiding bank fees may seem impossible depending on the bank you’re with. That’s the largest factor in this equation. To fully avoid bank fees, you might want to consider switching to a different bank with better policies on fees.
Typically, online only banks don’t charge nearly as many fees as local brick and mortar banks. They have lower overhead to begin with and don’t have as much of an incentive to try and “get you” for every transaction you make.
Ally, CapitalOne360, and Charles Schwab are good banks to look into, but there are plenty of smaller banks offering checking and savings accounts with no fees attached.
Awesome news, right? There’s no catch, and there shouldn’t be. You shouldn’t have to pay crazy maintenance fees just to have a bank hold your money.
Many of these online banks won’t even charge you an ATM fee. At the very least, they’ll have an extensive network of ATMs you can choose from. That’s more convenient than having to figure out where the closest branch is when you’re on vacation.
You can also look into online only accounts from the more traditional banks if you don’t want to change who you bank with. Simply doing your banking online can cut down on a lot of costs, and banks are willing to pass the savings in the form of less fees.
Consider Credit Unions, Too
Not a fan of no face-to-face interaction? There are other alternatives to online only banks, like credit unions! Since they’re member owned, they’re not as focused on profits. Fees from credit unions may not be as high or as plenty.
If you have a local community bank, you can always look into their accounts as well. The “big banks” that are more traditional, such as Chase, Wells Fargo, and Bank of America, are likely to have the highest fees with the most “rules” to follow.
Have a Good Buffer in Your Checking Account
Another common bank fee is the dreaded overdraft fee. No one likes to be notified their money has run out. For this reason, it’s critical to keep a good buffer in your checking account. A buffer you won’t touch.
You can’t just spend your entire bank balance and live paycheck to paycheck forever. Well, you can, but it will be more stressful than it’s worth.
Set aside a few hundred and keep it in there to prevent any overdrafts from happening. Check your bank account frequently to ensure there’s enough money to cover any impending payments you have.
Another option is to link your savings account to your checking account and use it as overdraft protection. You can also opt in to have an overdraft line of credit. I wouldn’t recommend either of these be your first choice, as they’re sadly not free with most banks, but they are cheaper than getting hit with multiple overdraft fees.
Hit the ATM Ahead of Time
How many times have you had to eat an ATM fee because you were pressed for time and had to use the closest one available? $2.50 per use might not seem like a lot, but it can add up.
Try and be more intentional about running errands if you have to stop for money. Get into the habit of going to the ATM before heading elsewhere.
Or you can just use your debit card to make purchases!
Read the Fine Print
Most banks have the details of their accounts online. Before opening an account, check to see what fees they charge and how much they are. Be sure to compare their accounts against your other options.
If you’re going with an online only bank, you shouldn’t be on the hook for many fees at all. If you’re going with a traditional bank, then take the time to evaluate the fees charged for things you might not think about.
Look into foreign transaction fees, check fees, monthly maintenance fees, overdraft fees, minimum balances required, ATM fees, and transfer fees.
Consider Switching Accounts
Did you sign up with your bank years ago, perhaps before you were as financially savvy as you are now? You might have an account with a lot of parameters that need to be met.
If you have a branch nearby, pay them a visit or call and explain that you don’t think the account you have is a good fit for your current situation. A representative from the bank should be able to pair you with an account that better suits your needs – and hopefully has less fees associated with it!
When might this be the case? Many traditional banks have tiered accounts (silver, gold, platinum) – the more you can keep in your account, the nicer the perks might be, but the greater the fees. Keep it simple when it comes to banking.
Ask to Get a Fee Waived
In some circumstances, banks are willing to waive fees. This is especially true if you’ve never encountered a fee before.
Banks are making money hand over fist with the amount of fees they charge. In the first three months of 2015, Chase, Wells Fargo, and Bank of America made over $1 billion in overdraft fees alone.
So don’t feel too bad about asking your bank to waive a fee if it’s not a common occurrence for you. Be nice and understanding about it, and try again for a different representative if you have to. Let it be a lesson learned the hard way, and heed the other advice here!
It’s Not Hard to Avoid Bank Fees
Overall, avoiding bank fees is easy if you know which banks don’t charge them. Aside from that, it’s a matter of paying attention to your account. Ensure you have money to cover payments, plan out your trips and check to see if you might need money from the ATM first, and consider switching to an online only bank.
Have you ever gotten hit with a bank fee? Which one? What steps did you take to make sure it didn’t happen again?