Beware of Bank Account Fees

Bank account fees are something that can be largely avoided with wise shopping, perseverance, and personal responsibility. Large banks tend to impose fees more than credit unions or regional banks. If you do get a charge, often negotiating with the bank will get it reduced or dismissed.

With the new 2009 banking laws coming into effect, banks are taking away the best things such as free checking and free fraud alerts. Read the information they send you as the changes are often hidden in the fine prine.

• No more free checking accounts. Wells Fargo, HSBC, Bank of America are already taking away free checking. Monthly fees are as high as $15. The ways to waive these fees is usually very high minimum balance, carry a mortgage, or direct deposit.

Bank fees for 2009:

• $12.55: Average monthly fee for falling below the minimum balance on interest-bearing checking accounts.
•  $29.58: Average overdraft fee in 2009, up from $22.62 a decade ago.
•  16%: Average credit-card rate increase in the year since the Card Act was passed in 2009.
•  $39: Median fee charged by banks for late credit-card payments.

Here are bank account fees you need to monitor:

1. Use of teller charges. Banks drew fire from consumers in the 1990s when they tried charging a fee if human interaction occurred when depositing or withdrawing money. There are scattered reports of these fees popping up, mostly now in the form of "excessive" use of tellers. Some banks, for example, will give you two free teller visits a month, but charge you for extras.

2. Account inquiries. This is the phone version of teller fees. Make a call about your account, ask a question about a charge, or order a new book of checks and you could get hit with this service fee.

3. Closing accounts. Many banks will charge you a fee if you close an account within 90 days -- and sometimes within six months -- of opening it.

4. Currency conversions. Got extra Euros from a recent trip that you want converted to dollars? It will cost you. If purchases are made in a foreign currency, such as euros, an extra 3% will be added on to your bill.

5. ATMs. If you use an ATM that does not belong to your bank or has an agreement with your bank you could get charged twice - once by your bank and again by the ATM's owner.

6. Money orders and cashier's checks. The typical rate is $10 per check.

7. Making payments by phone or online. Some banks charge a convenience fee of $5 to $15 to make payments by phone or online.

8. Balance-transfer fees. The usual rate is 3% to 4% although some large banks are going to 5%. This fee will get added on to your existing account and you will start paying interest on it.

9. Need account research? It will cost you around $5 for a copy of an old check or archived statement.

10. Wire transfer fees. These start at $8 and will vary widely from bank to bank. International transfers will cost more.

11. Personal finance software download fees. Some banks actually charge you to download transactions into your personal finance software. The going rate is about $100/year.

Credit Card Fees

1. Credit card late fees. New legislation will put caps on some of those fees and on how they are charged against old and new balances. But until then, expect to see them grow.

2. Over the limit charge. This cost is increasing.

3. Grace periods. Expect them to end or be severely restricted.

4. Annual credit card fee. In the early days of credit cards, issuers charged consumers a yearly fee for the right to charge. Competition drove most away, but it looks like they may make a comeback. Read your mail; if you get something from the bank, it is usually because they are making a change...in their favor. Find out what it is.

5. Cash advance fee. Getting cash on your credit card. A decade ago, most credit card issuers imposed a 2% fee with a $2 minimum fee and a $10 maximum fee on cash advances, according to CardWeb.com. Today, the fee is 3% with minimums ranging from $5 to $15 and no maximums. There is NO grace period on a cash advance fee.

Checking Account Fees

Checking account fees. This is the privilege of using your own money charge that many banks discontinued. But charges are starting to creep back into the system. Consumers should not assume their checking accounts are fee-free -- or if they are, that they will continue to be infinitum.

1. Returned deposit. If a check deposited in your account bounces, you're charged a fee. Accept checks only from trusted sources.

2. Stop payment on a check. Typical charge (2009) is $25 per check.

3. Overdraft fee. Should you unknowingly bounce a check, you could be charged repeatedly before finding out and balancing the account. Many consumers argue that banks should deny them cash at the ATM if it's going to overdraw the account.

4. Minimum balance requirements.
5. Transaction limitations.
6. Monthly service charges

Due Diligence

Here is a list of fees to ask a bank/credit union before signing up for services.

Bank fees

• Use of teller fees
• Account inquiry fees (phone, online)
• Closing account fee
• Money order fee
• Cashier's check fee
• Making payments fee (phone, online)
• Balance transfer fee
• Research fee (old check copy, archived statement)
• Wire transfer fee
• Personal finance software download fee
• Currency conversion cost

ATM fees

• Withdraw (out of network) fee
• ATM locations
• Overdraft charges

Checking account fees

• Overdraft fee
• Returned deposit fee
• Checking monthly charge
• Checking account minimum balance
• Checking account transaction limits
• Stop payment on a check fee

Credit card fees

• Cash advance fee
• Late fee
• Over limit fee
• Grace period
• Annual fee

Comments