How To Avoid Record-High Bank Fees

Bank fees are increasingly disproportionate to the cost of business they’re supposed to cover, as shown inBankrate’s latest annual survey of consumer banking costs.

  • Average NSF (non sufficient fund) fee: $28.95, a 2.5% increase from last year
  • Average ATM surcharge is $1.97, up 1%
  • The minimum balance required to avoid fees on interest checking accounts at a brick and mortar bank: $3,461.84, up 4%
  • The average minimum required to open an online checking account: $650.81, up $517.48

Fees are designed to take advantage of your inattention. To avoid getting tripped up…

…know the rules on your account regarding fees, like minimum balances and to minimum activity. Know if, without notifying you of the insufficient funds, the bank will let you withdraw or debit more on the card than is in the account, and then charge you a fee. Never try to “game the float” by writing a check or passing a charge you can’t immediately pay for with the money sitting in your account. Make fewer and larger ATM withdrawals to avoid racking up fees.

Banking fees continue to soar [Bankrate]

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  1. RagingBoehner says:

    Where are ATM fees only $1.97? I haven’t seen them below $2.50 in a couple years, and usually they’re $3 in the DC area.

  2. chemmy says:

    Mickey-D’s – home of the 99-cent ATM

    • azntg says:

      @chemmy: Depending on the ATM and if you are a Credit Union member (and your credit union participates in the CU24 Network), even that 99 cents fee is waived.

  3. Law-Talking Guy says:

    I want to say two words to you. Just two words.
    Are you listening?
    ING Direct.

  4. gatewaytoheaven says:

    I think a lot of people make the mistake of opening up a “higher tiered” account for the extra freebies but aren’t able to keep a minimum balance.

    I know on campus we had a lot of bank reps come and open “college” accounts for students, only to upsell a different product with a minimum balance. We want it because it gives us something free (i.e. checks) and sounds better than a “student checking account.”

    I would’ve probably fallen for that had I not have already opened a free checking account from WaMu and an free interest bearing (no minimum account balance) from USBank.

  5. pete7919 says:

    The one that has been a real pain to me is the “Unavailable Funds Fee” which in my case is the penalty for withdrawing money before it’s cleared. With online banking and Quicken (or similar) it’s easy to get ahead of yourself if you are not paying attention!

    • DH405 says:

      @pete7919: Wow, my bank doesn’t have that. It’s great to see them incentivizing their slow-moving deposits. Smart.

      How much do they get you for each time?

  6. buckfutt says:

    Gee, I dunno, “don’t bounce checks?”

  7. Anonymous says:

    Inflation (CPI) was 4.1% in 2007. You need to take that into account in anything of this sort.
    More fundamentally, what kind of “average” is this? The article is utterly unclear. Did they just add up 25 banks’ fees and divide by 25? That is a USELESS number, because it doesn’t take the relative size of the banks into account, and in any case no individual is directly affected by the average, just by what their individual bank charges (or what others to which they could switch charge).

  8. Uglyshoe says:

    I can pay my credit card online free, but to post the payment on the same day costs $15, so you must enter a date generally less then 20 hours in the future. I guess they have to get those digital bits good and ready to be transfered to their coffers.

    • Blueskylaw says:

      @Uglyshoe:
      They do that because thats about the cost to send a check by express mail, so they figure that at least they saved you a trip to the post office.

      • DH405 says:

        @Blueskylaw: The stupid thing about that is.. all a check is to those companies is a hard copy equivalent of you typing in your banking info. They open it up, scan it, and toss it in a bin while they electronically withdraw the funds.

        I don’t get why the banking industry needs to treat new money-handling systems like they are still on the old ones.

  9. dmuth says:

    That picture is disturbing.

    Was it ganked from Superdickery?

  10. Blueskylaw says:

    Were not these “Synergies of Savings” from mergers supposed to bring down costs? Not that I’m insinuating that banks would raise fees because of less competition.

  11. blackmage439 says:

    Whoa, where the hell are these banks?

    NSF: Keep an eye on your savings, and have checking & savings linked to cover “overdrafts”. My local bank charges a paltry $5 for emptying your checking in one transaction. I have NEVER paid an actual overdraft or NSF fee of double-digit magnitude.

    ATM surcharge: I’ll give you that one. However, that’s why I switched to a bank that covers ATM fees from competing banks up to a certain amount each month. If I can help it, I will NEVER do business at a bank that charges fees for their own ATM’s.

    Interest checking account: Each bank has their own definition of such an account, so I’ll just take your word for it. I had a Money Market Checking account with Countrywide until recently, but I doubt the minimum to avoid fees was above $1000.

    Average minimum to open online checking account: Never had one, so I can’t comment.

    The two banks I happily use right now are:

    HSBC: Still has one of the highest CD and online savings rates in the nation. At the least, they have the best minimum-balance to return-rate ratios. Both, I believe, have $1 minimums to collect interest. Early withdrawal fee for the CD is a meager one month’s interest.

    National City (to be PNC): Fee-free checking, free checks, ATM surcharge reimbursement, low or no minimum balances, rewards program (whether or not it sticks around after the merger, we’ll have to see).

    • azntg says:

      @blackmage439: Well, the way around ATMs is to shop at retailers offering cash back (if you make a PIN purchase).

      Did that while I was in New Orleans, when I needed cash. Only major banks that I saw everywhere were Chase, Capital One and Whitney Bank.

      I had a Washington Mutual and Commerce Bank debit card at that time. Bought a low priced item at Walgreens and asked for $20/$40 cash back. Not only did I sidestep the ATM fees, I also was up 12 cents (3 cents with each debit purchase, for what its worth) too.

      Ironic. Now, Chase and WaMu customers can use each others ATMs free of charge and North Fork Bank in NYC has been rebranded to Capital One. All of them just shortly after I came back from NOLA.

  12. AD8BC says:

    I stay completely away from the big banks… In West Michigan I used Macatawa Bank, with free checking and no ATM fees and they refund the foreign ones automatically. In Dallas/Fort Worth, I now use Bank of Texas, same thing but to get a rebate for your foreign ATM fees you need to send in a form with receipts… no big deal.

    And keep a good buffer in your checking account, to cover things you haven’t budgeted for. And, for God’s sake (Pete’s sake for you athiests), make a budget! And then you will never need to worry about overdrafts.

  13. mbz32190 says:

    I never understood why people pay ATM fees. Sheetz (M&T Bank) and Wawa (PNC ATM’S) in the Northeast don’t charge a fee, and I’m sure there are others as well. There was one emergency where I had to use an ATM in a Sunoco APlus store and was surprised there was only a 50 cent charge (reimbursed to me anyway)

    My current CU reimburses me up to $4 a month so I really don’t worry anymore. If I know I go over that, I’ll just get cash back from a store.

    • azntg says:

      @mbz32190: Because not everyone is privileged to either: 1) have a bank or credit union reimbursing them of foreign ATM fees, 2) have a fee-free ATM nearby, 3) have the time to make a quick shop at a cashback participating retailer just to get some quick cash and/or 4) have a bank / in-network ATM within convenient distance of their home/work/etc.

      Easier to blame than to find yourself in that situation sometimes.

  14. vastrightwing says:

    M-A-T-T-R-E-S-S. It has no fees. No penalties, no rude employees, won’t report you to the IRS. A mattress wan’t let you spend money you don’t have, so it will save you from deficit spending. Believe it or not, it’s safer than a bank. Why? Because banks steal from you 100% of the time. A thief is less likely to steal your money from your mattress than a bank is.

  15. bigmac12 says:

    As long as you can keep sufficient funds in your account to pay all your re-occuring bills by “auto pay” the Credit Card scammers can never nail you for “late payment fees”, even tho they keep changing the dates around to trap you.
    One less thing to worry about in these “trying times”.

  16. notbob50 says:

    I use the Virginia Credit Union. No checking fees, free ATM if I use the WAWA, and friendly, helpful employees.

  17. Howie411 says:

    I used my Bank of America Check card for an online order a few weeks ago, and BOA charged me an international service charge because the company was located in Canada. I was pissed they didn’t seem to give a damn.