Maybe you have accepted overdraft fees or ATM fees. These two fees are among many fees that tend to show up on your statement without you knowing. Even if you try to research every fee your bank charges, it is extremely difficult to find the information. These fees are generating impressive profits in the banking industry.
According to an article published in The Wall Street Journal, banks have earned an approximate $ 80 billion on fees in 2006. Ten years ago, fees accounted for just 3% of bank income.
We all know that overdraft fees can add up rather quickly and either destroy your budget or snowball into late payments on bills due to lack of funds. The majority of banks always clear the largest check or transaction first. They do this so your $ 5, $ 10 or $ 20 transactions will all bounce and produce an abundance of overdrafts. So instead of clearing the smaller transactions first and having one overdraft charge (for an average of $ 30) on the larger transaction, you will have three overdraft charges (totaling $ 90) for the smaller ones.
Tips: Talk to your local bank branch and see if you can connect a savings account with your checking and have them automatically deduct funds out of your savings if and overdraft occurs. There may be a $ 5 fee every time your savings bails you out, but at least it's not a $ 35 fee. Also, it can be really beneficial to monitor your account online through your bank's website. This way you can see up-to-date available funds. Most online banking services offer a bill pay feature where you can pay all your bills electronically. They also provide a bill payment pending area, where you can quickly click cancel payment if you find you are short on funds. This can be a preventive measure in avoiding over drafting.
We all dread late fees, especially if we know in advance that we can not make the payment on time. Here are some numbers to throw out at you courtesy of MSN Money.
Below are the average costs of late fees on credit cards from 1994-2005.
1994 $ 12.55 1995 $ 13.25 1996 $ 14.21 1997 $ 19.24 1998 $ 22.10 1999 $ 25.61 2000 $ 27.10 2001 $ 28.29 2002 $ 30.04 2003 $ 31.44 2004 $ 32.61 2005 $ 34.42
Tip: Try to make all credit card payments online either from a bill pay feature on your personal banking website or on the credit card site. Make your payment no less than 2-3 days in advance. Computer systems will process your payments electronically leaving little room for error. More mistakes may happen if mailing in a check to the credit card company. It can get lost in transit; A payment processor can improperly input the payment or it could have been misplaced in the mail room. You never know what can happen.
According to an article in MSN Money, on average, your bank charges you 25% more than it did six years ago for using another bank's ATM. Not only can you be charged by the bank who owns the ATM, but you will also get a surcharge from your own bank for using the other bank's ATM.
Tip: Try to use your own bank's ATM. This way none of these pointless fees will add up. Also, Washington Mutual ATM's do not charge other bank's customers for using their machines, according to MSN Money. You will still get dinged by your own bank.
Since banking institutions have entered the digital age, less paper is being used. So if you need a copy of a previous check for some reason, some banks are charging photocopying fees. Banks now scan your processed checks into a digital database and make them available for download via online banking. So instead of requesting a photocopied check, you can make one click of the mouse and print the scanned image of the check directly from your computer.
Last-Minute Bill Pay Fees
You know the times that you find out some bills are due on the day of or the night before? You have the funds, but can not send a check or make an online payment before it is due. So you call and make a payment over the phone. Expedited bill-pay fees range from $ 5- $ 15 and in 2006, banks made $ 1.26 billion from these timely payments.
Tip: Online payments take 2-3 days to process. Print out a calendar and fill in what bills are due on specific days. If you are into technology, set up reminders on your BlackBerry, cell phones, PDA's or Microsoft Outlook. Some banks have services through online bill pay where the bank will send you email notifications a week before the bill is due.
These late fees are the most detrimental among the many fees that banks now apply towards consumers. Obviously, by keeping track of your expenses daily and making timely payments, you can tremendously decrease your chances of getting hit with unnecessary fees. In addition, if you know that you are in good standing with your bank and rarely overdraft, it does not hurt to walk into your local bank branch in person and ask for a court refund. Most banks will work with you, if you are a good customer.