Battle Bank Fees

Banks love fees. Want to wire money? Need to pay a fee. What to stop a check? Need to pay a fee. Need to use the bathroom? Gotcha!

Banks earn billions of dollars each year on fees. At first, they snacked on fees. They let business go as usual and accepted whatever fees arose out of errant customer behavior. Eventually, they came to rely on these fees and shaped their own processes and protocols to maximize fees. Remember how banks started cashing checks in order of size, rather than some other, more reasonable, method like the order in which they came in? By cashing the larger checks first, they increased the probability of an overdraft (cha-ching!). An overdraft meant fees! Fortunately, the government has pushed back on that sort of behavior but fees still remain and they still punish customers to the tune of hundreds of billions.

As part of my Foundation series covering the Basics of Banking,, I uncovered a lot of interesting information about banks and the banking industry including how insidious bank fees were. Here’s a list of the three most common bank fees and how you can easily avoid them.

Overdraft fees: An overdraft fee is charged when you make a financial commitment (a check or debit card charge) you can’t fulfill. When you write a check for more than the amount you have in the bank, you’ll get charged an overdraft of insufficient funds fee. Do it more than once and the fees get larger each time. These fees are the easiest to avoid because they’re the result of carelessness, you need to keep close tabs on how much is in your account. At the back of your checkbook there should be a “check register,” a little pad you can use to record transactions and maintain an accurate checkbook. By keeping an up to date check register, including debit transactions, you can practically prevent these fees from happening.

ATM fees: Whenever you use an ATM that isn’t affiliate with your bank, you will get charged ATM fees. First, the ATM owner will charge you a fee. Then, your bank may charge you a fee. Some banks will refund you these fees if you satisfy certain conditions, like a direct deposit or a minimum balance. If you find yourself paying these fees often, I’d switch to a bank that offers to refund these fees.

Minimum balance fees: Many “free checking” accounts will have a minimum daily balance requirement. If you fail, even for just one minute, to have a daily balance above this minimum, they’ll hit you with an “administrative” or minimum balance fee. To avoid this, just avoid all accounts with this requirement. There are plenty of banks that offer free checking without a minimum balance requirement and you should never subject yourself to that requirement.

If you are charged a fee, try to ask for it to be waived. If you do happen to make a mistake, it never hurts to play nice and ask them to waive the fee. Many banks have policies where they are willing to waive your first transgression (how nice!). If you have multiple overdrafts, you might be able to work it down to one, the first. It never hurts to ask and it can save you a bundle.

As a consumer, I think these bank fees are unfairly punitive and much higher than what the bank pays to handle them. As a taxpayer and unwilling investor in many of the banks in America, I think maybe these bank fees aren’t high enough! What’s the worst fee you’ve ever been dinged for?

Jim writes about personal finance at his personal finance blog, Bargaineering.

(Photo: mexifelio)


Edit Your Comment

  1. bahalana says:

    I’m sorry, but the fact that you feel the need to tell people that there’s “a little pad you can use to record transactions and maintain an accurate checkbook” to avoid overdraft fees is symptomatic of the reason this country is in the financial shape it’s in. Good grief!

    Besides getting nickel and dimed to death with fees, most banks are paying you zero percent or only slightly more even on savings. Check out some online banks like INGDirect, EmigrantDirect and HSBCDirect that pay higher interest on savings than most banks are paying on CDs. Not too long ago I was getting 5.15% on my regular savings account with EmigrantDirect. They also seem to be much less fee driven and transfers to linked accounts are free.

    • Jesse says:


      That astounds me also. A vast majority of overdraft fees can be prevented by keeping track of cash flow in and out of that account. It’s easy and registers can be maintained in a checkbook, spreadsheet, notepad, computer software, sheet of paper or anything else that works.

      Online savings accounts are a great tool also. The only disadvantage though is that transfers can take 2-3 days, at least with FNBO direct.

      • aguacarbonica says:


        Okay I’ll be honest. I don’t use that little check register thingy, and I forgot it was back there.

        But that’s because I don’t write checks. They’re terribly antiquated. On the off chance that I have to make a payment where I would prefer not to disclose my credit card information, I use online banking to send an electronic check.

        • Anonymous says:

          I’m bothered by the fact that people don’t place any value on checks anymore. Just because they aren’t as fancy as the shiny new platinum card with a picture of your dog on it does not mean it has lost its value. Checks, to me, seem more secure. A waiter or checker can easily swipe your card with their own device and steal your number. If you have an RFID chip in your card, someone standing behind you in line could grab that info without you even knowing. Sure, it’s highly unlikely, but it’s more unlikely that someone would be able to forge one of your checks. Second, it’s less risky from a psychological standpoint. You may notice that when you pay in cash, you or someone you are with will take an extra second to consider getting something. That’s because they are giving up wealth in a tangible form. You are dealing with the debt right off the bat. It’s the same with checks. If you hand over that paper and record in your check-book, that fact that you just handed over your wealth registers, whereas a card is swiped and returned. You don’t even have to sign if your purchase is under 20 dollars (where I live anyway). You really don’t have to consider what you did. Finally, if one pays with checks and records it they know it’s over with. There’s no bill, no interest, no late payments, it’s now yours. Obviously if you overdraft then you’re out of luck, but I’d rather pay a 30 dollar fee than 30% of my purchase. Actually, one more thing. When you buy online and use your card (rather than using a site that allows you to mail payments) that site will often store your number for their records or future use. The more places its in coupled with the fact that it’s online makes theft a lot more likely. For all these reasons, I use my credit card very sparingly and use cash and checks whenever possible.

        • Jesse says:


          I hardly write checks either. My daily activity is normally run though a credit card which I pay off every month. It makes keeping records easier since there are fewer transactions going through the checking account and thus requires less effort to track down expenses (albeit, it simply moves the “what the heck did I spend here?!” questions to the credit card).

          In terms of keeping a register, I have a spreadsheet setup in Google Docs and update it every week or so. It’s setup to automatically factor in a safety net so I can plan transfers from my online savings account when cash flow is tight.

        • tcp100 says:

          @aguacarbonica: ” On the off chance that I have to make a payment where I would prefer not to disclose my credit card information, I use online banking to send an electronic check. “

          I do not understand this mentality. Why in the world would you rather disclose your bank account and routing number (which is on a check, and is transmitted by many online bill pay systems to the payee) versus your credit card information?

          If someone gets your credit card info, it’s not your problem. If someone gets your bank account info, you’re in for a world of hurt.

          • reflection717 says:

            @tcp100: In most cases when you use a bank’s online bill pay feature they debit your account, deposit the money into a holding account, and then write the check on your behalf out of that holding account. Your information is never released to anyone.

            For this reason it is the smartest, easiest, and safest method of paying bills.

            I’m actually a little disappointed it didn’t play a bigger role in this article (Actually I didn’t see much advice, more explanation than anything else.)

            I suggest to everyone I know (and when I worked at a bank I suggested to every customer) that they use the online bill pay feature on the bank’s website. For one thing it is much more convenient than writing a paper check and mailing it. It does have the saftey too as stated above.

            Most of all though, it completely avoids overdraft fees from checks. If you try to pay a bill and you don’t have enough in your account the bank will simply not pay that bill. In most cases you’ll get notified that you don’t have enough (either at the time of entering the bill or when they try to debit and it doesn’t work).

            Long winded, I know… sorry!

    • Bs Baldwin says:


      They also have alot less overhead than brick and mortar banks, this is why their rates are lower. It is the same with credit unions, they pay little or no taxes.

  2. Eyebrows McGee (now with double the baby!) says:

    I am with a credit union. I pay $3 per overdraft (when it draws from my savings into my checking, rounded up to the next $50). We do have a minimum balance to maintain in our free checking, but with several ways around it: it’s waived if you use direct deposit (as many people direct deposit the paycheck, pay bills, and move the rest to savings right away) or if you choose a “restricted” account (only 1 or 2 monthly teller visit, etc.).

    There are 7 locations in my city proper (of 120,000ish people), including one at the airport, one I can walk to from my house, and one my husband can walk to from work downtown. More than 100 proprietary (no-fee) ATMs in the area, including one in my workplace. Excellent online access (easy to use, full range of services), friendly locations where the line moves pretty quick, no attempts to discourage you from using tellers. Competitive rates on savings and borrowing products. So it’s not a hassle to use; it’s more convenient than most of the local banks, actually.

    All that, and their kiddie accounts come with a financial curriculum parents can use to help kids learn about saving and money management! Oh, and they have financial planners on staff, salaried by the credit union, that any member can take advantage of, free, to do some financial planning. The CU doesn’t sell any of the products, so there’s no commission or anything involved. (Flipside, you have to go find your own way to invest, etc.) And I get a check at the end of the year when the credit union pays member dividends.

    So use a credit union (hi, HomerJay!) and escape the worst of this stuff.

    Also, you can avoid overdraft and have some emergency money by keeping a buffer in your checking account. When my checking account says “zero” there’s actually $300 in there. Since it’s a joint account for me and my husband, occasionally there’s a miscommunication on recording things in the register. And on one or two occasions, I’ve written a check, meant to go right home and transfer the money, and forgotten. (This does, of course, require $300 in emergency funds, which isn’t possible for everyone.)

    • sarahq says:

      @Eyebrows McGee: Amen regarding credit unions. When a financial institution is not-for-profit, the impetus to slap fees on everything is greatly reduced. I left my local bank for a credit union ten years back after the local bank was bought by BB&T. Not only did I stop having to pay so many fees, but the credit union’s rates are superior.

      For those who are interest in switching, try a credit union locator: [] or []

      • NinjaMarion says:

        @sarahq: It can just as easily be argued the other way. It would be just as easy to say that because CUs are non-profit, they really couldn’t care less whether they treat you well and keep you happy. Because banks are for-profit they have plenty of incentive to make sure their customers are satisfied so that they can keep making money off them. In my experience, that would actually be very true, but not for everyone.

        There’s no clear better choice between banks or CUs. I’ve been with a terrible credit union, and at my old job at a call center for hundreds of CUs, witnessed how awful many of them are. I’ve been with a bank (National City) quite happily ever since leaving that shitty CU. It all depends on the specific place you go with. Hell, even in the same bank or CU, different branches can be worlds apart in the level of service they provide.

        • crashfrog says:

          @NinjaMarion: It would be just as easy to say that because CUs are non-profit, they really couldn’t care less whether they treat you well and keep you happy. Because banks are for-profit they have plenty of incentive to make sure their customers are satisfied so that they can keep making money off them.

          Yeah? How’s that theory been working out for you so far? Your faith in the free market is cute, it really is.

          • NinjaMarion says:

            @crashfrog: If you’d have read what I wrote, you wouldn’t have to ask that, as you’d have read that it’s worked out great for me. My bank is great. My non-profit credit union that I was “part owner of” was fucking horrible. Many credit unions are. As are many banks. Which I said in the original post. Nice try to make it sound like I was blindly defending banks or something stupid like that though.

            You really must not read well at all, in fact, since I actually said that there’s no blanket statement that accurately can prove banks or CUs are better. My post had nothing to do with faith in the free market. It was just stating that it CAN just as easily be argued the exact opposite of the way the person I responded to put it. That was then followed by pointing out how it depends on the individual establishment and not one stupid, sweeping, general rule.

            So next time you try to call someone out sarcastically, make sure you properly understand what they’ve written.

            • FooSchnickens - Full of SCAR says:

              @NinjaMarion: Zing.

            • crashfrog says:

              @NinjaMarion: Or, you could argue it on the basis of evidence, and there’s ample evidence – not just anecdotes – showing that non-profit credit unions have greater customer service outcomes than for-profit banks.

              How many credit unions are getting federal bailouts? How many are being partially nationalized? Oh, that’s right – none. Because contrary to Econ 101, when you throw profit motive into the mix, the willingness of a business to serve customers above and beyond – or even just at the normal level – rapidly declines. It’s like saying that you can trust a thief to work in your best interest, because the better off you are, the more he has to steal. Sounds good on paper, but in practice, thieves and businesses are just looking for the shortest-term way to rip you off.

    • Plates says:

      @Eyebrows McGee: Credit unions are good, but if you are regularly going between two or three states they aren’t exactly easy to use when you are spending a few days a hundred or two miles from the nearest branch.

      • closed_account says:

        @Plates: Exactly. Try to deposit a check when you are on the road at your local credit union.

        • NinjaMarion says:

          @chadbailey: You can do stuff like that as long as your credit union participates in shared branching.

          • FooSchnickens - Full of SCAR says:

            @NinjaMarion: Exactly. My credit union has deals with several other credit unions and larger banks (BoA, formerly WaMu, Suntrust and one other that escapes my tiny little brain) so that’s more or less a moot point for me. Plus, BoA has multiple sister banks internationally that I can also use since i’m grandfathered into their “family.”

            The only caveat i’ve found so far to my credit union is that their weekend hours are opposite of everyone else’s. They’re open 8-5 on weekdays, but only open from 9-1 on saturday. Doesn’t matter much since I get my paychecks on Monday.

            I love my credit union.

      • Eyebrows McGee (now with double the baby!) says:

        @Plates: I can’t really think of any banking I do in person other than depositing the occasional travel check (regular checks direct deposit) and I don’t even use ATMs. So it doesn’t really make a difference to me.

      • allthoseships says:

        @Plates: @chadbailey:

        try to get around that: locations of credit union service centers all over the US. so if i belong to a CU in Virginia, i can access my account when i’m in New Jersey.

      • grumpygirl says:

        @Plates: If they’re part of the CU Service Center network, it’s not really a problem.


      • jake7294 says:


        It’s called shared branching. Shared branching allows a credit union member to deposit or withdraw funds from participating credit unions all across the country. You simply go in, have your ID and account number, and you’re fine.

        Same for ATMs. 1000s of ATMs you can use for free with them. is where you can find locations.

      • MikeVx says:

        @Plates: Most Credit Unions are affiliated with the Co-Op ATM Network, which affiliated with the ATM Axis a few years back, the upshot is that most Credit Union members can get no-surcharge cash at any 7-Eleven in the US. (7-Eleven Canada uses different networks.) Most CU ATMs are usable, and about half of those do take deposits for network users. I have far better odds of finding a free ATM in any random spot than any commercial bank customer.

    • couldberunning says:

      @Eyebrows McGee:

      Your credit union is much better than mine then. They refuse to reverse any fees or waive any fees unless they are at fault. My overdraft protection recently got revoked without me knowing for a month due to me changing addresses. Normally if i receive an overdraft it just takes it from savings and I occur no fees. Since they revoked it i got hit with 4 35 dollar fees. Took it all the way to a branch manager and still couldnt do anything. At that point i just absorbed my loss and currently looking for another bank.

      There excuse… they are a not for profit institution and therefore could not reverse any of the fees.

      Oh and the name… TIC Federal Credit Union in Columbus, GA.

      • ddouthitt says:

        The many recommendations for using a credit union instead are good. There are many reasons, but here are several reasons specifically germane to this discussion:

        1. Many credit unions provide fee-free ATMs – and in fact, the Credit Union National Association is a leading proponent of revoking all ATM fees.

        2. My credit unions, and possibly others, charge you a single overdraft fee for each day you are overdrawn. Banks charge you a larger amount for a single overdraft, then do it over and over and over for each item.

        3. Many credit unions are part of networks like Cirrus and Plus, so that your debit card works anywhere – and if you get a MasterCard debit card, you can use it like it was a credit card and have it come out of your account directly.

        Also, if you get bad service at your credit union go to another – there are a lot of credit unions out there. In fact, most credit unions are small and can’t afford to have people ticked off; you might consider going to a smaller credit union. (Interesting fact: average number of employees at a credit union in the United States: 6).

  3. Anonymous says:

    Join a credit union! We pay $1 a month flat on joint acct. for the use of our debit cards. and we use the debit cards every day. They do have overdraft fees, if you mess up. But most (around here in Midwest anyway) also offer internet banking, direct deposit, web bill pay, all the perks of big banks, with much less cost to the consumer. (and no, I am not, nor any family members, employed by a credit union!)

  4. Tallanvor says:

    Alas, if only the wire transfer fees were as easy to avoid. –One of the reasons I chose my bank in Norway was because it didn’t charge me for wire transfers. Unfortunately, Bank of America still charges $25 to receive them. Of course, in a few months, I’ll have my credit cards paid off and instead of transferring money every other month, I’ll be able to get away with only doing it a few times per year.

    • Egat says:


      That fee irks me to no end. They are charging me a fee so that I can put money into my account there?!?! It’s insane!

    • ionerox says:

      @Tallanvor: It astounds me how high wire transfer fees can be… but at the same time I know the amount of verification and filtering a bank has to do in order to before sending a wire transfer through or accepting it (because of BSA, Patriot Act, etc.)
      If they were $10 instead of $25, I could live with it. But know this: banks charge each other and big business a lot for wire transfer fees to. (they might get volume discounts, but not by much).

  5. Trai_Dep says:

    Keep around $40 cash in your pocket as religiously as you wear clean underwear. You’ll be amazed at how quickly those macro-overdraft fees for micro-purchases disappear.
    Corollary: when clubbing/barring, figure out beforehand how much you’ll spend and cash it out. Leave the plastic at home. When you tap out (and you know you will, lush), shrug and make your friends step to the plate and buy their freaken’ round.

    • Verucalise (Est.February2008) says:

      @Trai_Dep: Clean underwear?? Whats that.

    • SanDiegoDude says:


      I’ve done that for awhile when going out for a night on the town. I stop by the bank beforehand and withdraw the cash I want, then leave the cards at home. Not only does it save “drunkenly buying the 10 friends around you a round” moments, but it also saves from the dreaded overcharges that sneaky bartenders will do on open tabbed cards.

  6. Oakie Pokie says:

    anybody who qualifies for a credit union yet still deposits their money into a bank deserves to be hit with every fee they qualify for.

    make the banks pay for their share of the current financial crisis by closing your account and moving it into a credit union. the benefits are numerous and obvious.

    • Plates says:

      @Oakie Pokie: Not for everyone. I regularly go between a couple of states and it is nice to be able to walk into a bank and get money hundreds of miles from home. Then again, I am using a fairly decent bank – TD.

      • cv says:



        Credit union ATM cards (Credit Union Co-Op) are capable of accessing the STAR network, thus the largest network of ATMs worldwide. I can go to other countries, let alone other states and withdraw cash.

        Many credit unions will allow simple transactions at the counter for other credit union members, as a courtesy. Also you can deposit money into a Credit Union Co-Op ATM, just like you were depositing money to your home credit union’s ATM.

        Will BofA ATMs let WellsFargo users do that?

        • cv says:

          Oh yeah, my credit union will reimburse me for foreign ATM transaction fees. I just need to fill out a simple form online.

          Will your bank do that?

        • Plates says:

          @cv: And if my ATM card gets demagnetized or my wallet is lost/stolen and I am 100 miles from the nearest branch I guess I am S. O. L.

          • cv says:

            I have never had a demagnetized card, nor have I lost my wallet since I was in grade school.

            Anyhow, I primarily use credit cards, not my credit union’s Visa debit card (which I still carry with my anyhow).

            If your ATM card has a tendency to get demagnetized or you lose your wallet rather frequently, stick with your bank. And be accepting of shelling out more fees for your big, multistate bank. For you, it’s worth it.

          • Trai_Dep says:

            @Plates: Or if Martians disembark, impregnate a comely lass using your stolen DNA, then focus their rapid-age-raygun on the hybrid zygote, so that your Martian love child – raised by Gypsies so he’s an expert pickpocket – steals your ATM card, then empties it, taking advantage of his physical similarity to you. Except for the two antenna sticking out of his forehead and forked sexual organs (but really, who checks for that?!)
            So, uhh, yeah, besides that, or for those countless Consumerist readers that regularly traipse in a tri-state area demagnetizing their ATM cards, Oakie & Eyebrow’s advice is spot on. Thanks for the tip, though.

    • madanthony says:

      @Oakie Pokie:

      I do use a credit union, and while I am generally happy with it, it does have it’s drawbacks – most noticeably no weekend hours, and only open past 4:30 one night a week. Lots of retail banks have better hours.

    • closed_account says:

      @Oakie Pokie: There are people that dont qualify for an account at a credit union still? All of the ones I have been seeing lately have something like if one of the following applies you are OK: 1) Work At This Employer 2) Work around This Employer A 3) Live in This City B 4) Go to Church in This City.

      And no, local “clubs” to store my money with are not more beneficial to me over a national network.

    • Anonymous says:

      @Oakie Pokie: Thanks for your unbridled disdain for bank users, as it motivated me to look up banks vs credit unions. Unfortunately, though the benefits of CUs may be numerous, I do not think they are obvious in the sense that a lot of people really do not know about them. In any case, I thank you, as my research has begun. This article isn’t the most recent, but it’s a start:

    • tcp100 says:

      @Oakie Pokie: Credit unions are great, if you’re OK with only a couple locations and can get to them.

      I work 120 miles away from where I live, and spend half the week traveling – so even though I belong to two CUs, I use a regional bank.

      It costs me less, because I can find their ATMs all over the area I travel.

      • tcp100 says:

        @tcp100: Oh, and furthermore.. ATMs in the STAR network do NOT substitute for a branch. When you get paid by clients (usually in large sums for 2-3 months of work), depositing at some random foreign ATM is NOT the safest or quickest way to make a deposit.

        I tried that once, put a deposit in some random “network” ATM in some podunk town I was traveling through. Took three weeks to fully post, and when I called my bank to figure out what was up, nobody had a clue. You’d be better off mailing the check back to your bank / CU home branch.

    • Sure I could agree with you, but then we'd BOTH be wrong. says:

      @Oakie Pokie:

      That’s such a nasty reply. “Anyone who does x, deserves whatever they get”

      Real helpful.

  7. ken2148 says:

    Another way to avoid or minimize ATM fees is buy something at a store where you can get cash back when using your ATM card for the purchase. Sometimes you’ll get a POS fee but it is typically much lower than an ATM fee. I’ve used this a couple of times when on travel where even the Credit Unions were charging high ATM fees.

    • closed_account says:

      @ken2148: Wait! Credit Unions do nothing wrong! They are great! There are no ATM fees with them! Try Chase- National Network and NO POS DEBIT / DEBIT CASH BACK FEES.

  8. madanthony says:

    If you use ATM’s a lot, see if your bank is associated with a fee-free ATM network. The credit union I use only has a handful of ATM’s (although one is in my workplace), but is affiliated with Allpoint ATM network as well as 7-11’s ATM network – I can use ATM’s in those places fee-free.

    Another way to avoid overdraft fees for micropurchases is to use a credit card instead – assuming that you are responsible enough not to charge more than you can pay in full at the end of the month. You get a couple week grace period, some additional theft/fraud protections, and can often get some rewards if you use the right card.

  9. nightshade74 says:

    Right… and my credit union only has 3,560 locations
    I can get money from… []

    • closed_account says:

      @nightshade74: Now with “FREE GPS Downloads!” haha

    • cv says:


      Actually, those are service center locations. If the back of your card has the Co-Op Network logo, you have access to over 28,000 surcharge-free credit union ATMs.

      Since my credit union reimburses me for non-network ATM transactions, I can basically use any bank’s ATM without paying a dime.

    • tcp100 says:

      @nightshade74: @nightshade74: @Micromegas: Date deposits the latest date you’ll think they’ll clear. Deduct all debits immediately in your register.

      Never assume “float” on a debit. It is gone the minute you swipe your card or hand over the check.

  10. ztoop says:

    No fees for me (not even ATM fees!) with my lovely Charles Schwab bank account. Ohh, did I mention I also get interest?

    • misterfuss says:


      I also have a Charles Schwab Investor Checking account. I love that it reimburses all ATM fees and that it pays interest (currently 1.0%) I signed up for it about a year ago when they offered 4.0% interest and my credit union offered only 0.25% interest on checking. Now my credit union offers 3.0% interest on checking accounts with direct deposit, so I’m torn if I should switch my direct deposit.

  11. JeffMc says:

    One thing I’m always shocked not to see here is that with most banks you can ask (in writing, sadly) to not be allowed to overdraft.

    We messed up once and had the old overdraft mess, after that we send in the letter and now if we don’t have the funds then it’s rejected which to me is better than going all day making small purchases and racking up $35 fees each time you buy a $1 pack of gum.

    • dl33124 says:

      There is another fee out there, typically gas stations and restaurants are now practicing this…they test your account for funds for $1 and once I had gotten low on my account and yet my Norton Security expired, I had just enough to buy it, but the did that test acount thing and I went into 2 overdraft charges, one for the $1 and then for the Norton!!!!, Thankfully the bank waived the charges and warned me that it is a practice that had been out for years and is becoming popular!!!!!!@JeffMc:

    • Nerys says:


      for many banks (wachovia for example) this is NOT an option. the micro loans for overdrafts are COMPULSORY. you MUST accept them or not have an account. PERIOD.

      the way you describe it is how it SHOULD work. I have 9 accounts (just in case good thing too after what happened with wachovia)

      ONLY ONE allows you to “decline” these overdrafts and thats commerce bank but they have no “free” accounts and who knows how long the nice terms will last with TD in charge now.

  12. framitz says:

    The article is completely worthless. I have had some experience with unfair fees though:

    Deposit check for $5000 and find that 5 checks bounced with resulting $35 fee for each. I investigated and found that the 5K check had cleared BEFORE any of the bounced checks got to the bank, but the bank tweaked the transactions so that the checks were processed before the deposit. The check had cleared but it cost me $175. I got no satisfaction when I called about it to get it reversed.

    Credit Unions are no better. I was scammed into continuing insurance on a loan after it was paid off and it cost me hundreds of dollars before I could get it stopped. In fairness the insurance was with a third party, but I blame March Federal Credit Union for pushing the scam.

    • CSL says:

      @framitz: I used to be rather proud to be a member of WF Federal Teachers Credit Union. I recommended them to all my family and started accounts for my kids. No longer!
      Unfortunately they have taken the same path as the most greedy in the banking systems. Manipulating deposits and drafts so that they can charge ever increasing fees! Don’t think having direct deposit saves you. They simply hold the most all checks until just before the deposit.I got charged a fee for being .02 cents off! Ask for mercy, you say? That went out when greed entered in!
      I now make sure I have cash to pay for almost all my purchases. I would close my CR account altogether, except that I have to have my paycheck direct deposited.

  13. Yossarian says:

    I use Quicken and my checking accounts all have an entry “transferring” money into my emergency fund (it’s really just a category in Quicken). My registers in Quicken always show at least $500 less than I actually have in the account. Makes it very easy to avoid violating minimum balance requirements and NSFs. If I ever need to start cutting into that cushion, I’ll already be in a position where I know I’ll need to be watching balances even more carefully.

    This approach is painless and has worked quite well.

  14. Micromegas says:

    Keeping track of your transactions in a checkbook doesn’t do anything to help avoid overdraft fees when the bank delays deposits and debits from being processed for two or three weeks at a time, then suddenly processes them all in one day in an order that guarantees the highest number of overdrafts.

    BB&T did this to me and many people I know. I’d never even consider banking with them again.

  15. microcars says:

    Overdrawn? How can that be? I still have Checks!

    /waves checkbook around for everyone see…

  16. VeiledThreats says:

    Those “money cushions” people suggest don’t work for the large part of the population who are living paycheck to paycheck either. Not saying that’s an ideal way to live at all, but most people dinged for these micro purchases don’t have an extra $500 to ignore in their account. These are the people who are affected most by some of the banks ridiculous fee policies, especially the debits before deposits and reordering of debits and the ones who can afford them least.

    • crashfrog says:

      @numberoneasa: Also I don’t see how keeping a $500 “money cushion” that you can’t ever spend ever is any different than paying overdraft fees. You don’t earn interest on the money, so it doesn’t keep pace with inflation; you might as well have just given it to the bank for all the good it does you. I mean if you put $500 of your money beyond your reach to save $250 (let’s say) in overdraft fees, what have you really gained? Seems to me that all you’ve done is doubled your losses.

      • mac-phisto says:

        @crashfrog: seriously? let’s say that $500 saves you from 1 overdraft per month. that’s like making $420 (assuming a $35 fee). if you invested that $500 at 5% (which you’d be hard pressed to find anywhere), you’d earn about $25 in interest.

        hell, even if it saves you ONE overdraft fee, it’s a better investment.

  17. Dragonis says:

    I just got a no-fees bank account. Still have to pay a fee when I use a ATM machine that isn’t affiliated with the bank I’m with. This usually isn’t an issue as being a student who commutes to school, and brown-bags my lunches the cash tips I get from work each week are enough for my main expenses, bus tokens and the occasional lunch when I had to leave in a hurry.

  18. HogwartsAlum says:

    The overdraft fees are the ones that get me. I hate those. I try to keep a cushion, but like everyone has said, it doesn’t always help when the bank processes debits and checks the way they do. That needs to stop. I’m not very good at keeping my balance straight, either.

    I don’t like ATM fees either.

  19. runchadrun says:

    My credit union is part of the Coop network so I can make withdrawls at virtually any credit union’s ATM fee-free. My CU has ATMs and a branch at my work so I can make deposits there for the few times I need to make a non-electronic deposit.

    If this isn’t an option, I will go to the local grocery store which has a self-service checkout that rarely has a line. I’ll buy a bottle of soda and get up to $50 back with no fee. Yeah, I’m paying for the soda but it’s less than I’ll pay in ATM fees and I get a bottle of soda.

  20. Robert Gormley says:

    On ‘being unable to deposit a check when you’re on the road with a credit union’: Almost all CUs are a member of the NCUA, and have reciprocal deposit arrangements using member ATMs throughout the country.

  21. Anonymous says:

    Whenever I grocery shop, I withdraw enough money for the week from my card at the checkout at no extra charge. I’ve seen alot of ATM card fraud recently in our area so I’d rather use my card on a limited basis in places I trust. Cash is king.


  22. Anonymous says:

    I recently was charged a $6.50 “administrative” fee on my BofA checking account. As a follower of consumerist, I have learnt that apparently being nice works. So I put it to the test. I called up customer service and ever so sweetly and calmly asked what the fee was for. I was told it was due to a minimum balance requirement. I then, once again, very sweetly asked if there was anything that could be done about it, and by the end of the call (which took all of 3 minutes) I came out with a different type of checking account that wouldn’t charge me a minimum balance fee, and a refund of the $6.50! Playing nice worked a charm – thanks consumerist!

  23. frodolives35 says:

    Does anyone else not have overdraft protection. At my bank you have a choice of a credit line or use your bank mastercard. The interest is like a cash wd but hey its for screw ups not a way of life. I have only had to use it a couple of times once when I knew I did not have the cash and used it as a short term loan. The second time was when a satalite radio company (who shall remain nameless may they rot in hell) just kidding about the nameless part it was serius took out a life time renew fee with out my permission. That was a nightmare and the overdraft protection saved me alot of fees and hassel. I did get my money back but it took about a month but I am sure they would not have paid any fees they caused without a lawsuit.

  24. Schalliol says:

    I love my First Internet Bank Account. I get ATM fee rebates, can deposit through the star network for free and I get interest too!

  25. Anonymous says:

    i might not be very popular saying this, but the rules are there to deter repeat offenders and if that doesn’t work, cash in on those repeat offenders for all the work that has to be done administratively to deal with their overdrafts. (i work in back office operations and I see the same names every day basically paying the overdraft processor’s salaries). niceness does help to get fees waived, if you are an occasional OD’er. if you don’t like a particular bank’s rules, bank elsewhere. don’t write checks if you don’t have money pay them, don’t co-mingle fun money with bill paying money to avoid ODing, and if you can’t handle that still, keep your money in a shoe box under your bed…

  26. Anonymous says:

    I’m not one to get into the overdraft scenario as I do believe you should always have enough money in your account. However, having made a mistake myself I understand this scenario but one thing a lot of people who are stressing the idea of overdraft protection are forgetting…is that many banks if not all have now added a FEE to DO the overdraft protection (sometimes $10).

    This makes no sense to me…you have overdraft protection to ensure you don’t overdraft…but to perform the protection they now charge you a FEE. This is why I personally have no sympathy for the banks…not only did they lend money when they knew they shouldn’t…to make up for their losses all of this time they simply added fees to everything they could and now the fees don’t even cover their expenses anymore. Soon…you’ll have to pay an air fee to breathe inside the branch while you pay a $20 fee to talk to the teller and have to pay a carbon dioxide fee for exhaling while talking to the teller. It’s absurd. I’m not against a business making money but when a business becomes outright legal extortion its wrong and there should be a way to correct it.

  27. TrueBlue63 says:

    If people are stupid someone will always be willing to capitalize on it. Just one more reason to actually study in HS instead of drinking beer and partying.


  28. Yoko Broke Up The Beatles says:

    It always doesn’t hurt to ask your bank to waive any and all fees. I used to get charged a TON of service fees per month, and when I decided I was going to cancel, my bank said they’d waive all fees if I stayed.

    By that time, new accounts had been setup at a different bank, so I just kept the wheels moving.

  29. Oscar Feliciano says:

    Overdraft fees should be illegal. If there are not enough funds in the account to cover the transaction, then DON’T process the transaction. Plain and simple. This is just another way for these greedy financial institutions to rake us over the coals and squeeze more of our money out of us.

    • t325 says:

      @Oscar Feliciano: That may be so for debit cards, but if I have $100 in my checking account, but write a check for $200, the bank can’t exactly deny that transaction when I write the check. And why should whoever I wrote the check to be screwed out of money because I bounced a check? The person who wrote the bad check should be the one getting screwed, and in that case, overdraft fees are completely acceptable.

  30. PLATTWORX says:

    I use Bank of America. I LOVE when the Bank of America ATM is out of service and I HAVE to use another bank’s ATM to get cash. That bank charges me, BofA charges me and when I called to say “Excuse me, I only used another bank ATM because you’re nearby one was broken” they won’t budget. That, I feel, should instantly cause a refund. They can tell the ATM was down and I am not pulling something.

  31. skycrashesdown says:

    The small bank where I work has an overdraft protection program that works like this:
    Every morning we get a report of any checks trying to clear or ACHs trying to go through for accounts that don’t have sufficient funds. We call you personally, tell you about it, and if you promise to come in and deposit money that day (or you have a savings account you authorize us to transfer money from), we pay the item. Most of our “fatals” customers are regulars who have lots of money and never bother to keep track of what they have in savings vs checking because it’s easier to overdraw occasionally and pay the $10, especially since they know we’ll pay the item for them. I love it though, because how many banks call their customers personally when they’re about to overdraw their account?

    • Katrine says:

      That sounds very much like the very small bank where I work (1 branch, 15 employees, town of 1500). When we get the morning overdraft reports our head bookkeeper (roughly 75, worked there since the earth cooled) decides whose checks get paid and whose don’t in case the money doesn’t get there that day. Wrote it to the local grocery store? It’ll probably go through. Wrote it for cash with “beer, cigs & bingo $” on the memo line? Mabel will send that back in a heartbeat!

  32. jpottsx1 says:

    Hey I’ve worked at a senior management/project manager level position at USBank and Commercial Federal in the USA and at the 5th largest canadian bank

    The game originally was to get you hooked on free transactions at Atm/abm MACHINES IN THE 1980’S, to reduce the workforce and increase profits. The next part of the equation is then adding fees and slowly charging for each ATM/ABM transactions which grew into the famed $1.50 per transaction on both ends of the transfer. Some even charged a percentage of the total transaction value up to 20% of the withdrawl.

    Going to the web originally in the USA required proprietary software you purchased and then paid by transaction. THe “.com” boom then ushered in the ability to once again cut costs by using the web to perform transaction. In Canada the internet banking was and is much more robust than its american couterpart. I was web banking in 1995/96 in Canada. The same functionality was not available at USBANK until 2000. I worked managing the architecture teams and was surprised at the strides being made by other USA banks of the same period.

    Banks make more money from credit problems than they do from on time and ontrack customers. The escalating fees for overdraft, the calculation of compound interst on Credit card balances menas you have to pay off card balances for at least two months before you begin to see any reduction in fees.

    The banks serve the sharholders no customers

  33. t325 says:

    I’ve been with the so-called big bad evil Bank of America for awhile and have never paid them a dime in fees. Nor have I ever paid any bank a dime in fees.

    Overdraft fees are avoidable. Don’t spend money you don’t have. Simple as that. And ATM fees, well, I’ve never run into any problems because around here, Bank of America ATMs are all over the place, and everyone takes debit so it’s never been an issue if I didn’t have cash.

  34. Anonymous says:

    Here is my favorite banking experience. My parents in GA had wired $5,000 to my bank here in Seattle, WA. I was charged $35 for the wire, and then they held the money for 7 days. Despite the fact that the moment they hit the enter key the money is electronically transferred from one account to the other, the bank told me that because it was coming from the other side of the country, there was a longer wait — anywhere from 3 to 7 days. I asked if they were still using the pony express to verify the money is in the account, but they didn’t laugh. Three days later, I ckeck my account online and see that the money has been put in my account. I write my partner a $3500 check, which he puts in his account that same day. We checked his account that night and my $3500 check had already cleared, so we paid a bunch of bills. Two days later, his card is denied when we are buying groceries. When we check the account, we have 7 bounced checks and are $1000 in the hole. The bank had cleared my check, and then decided to pull it saying that they needed more time to give the sender an opportunity to cancel if they weren’t the ones who actually sent the wire (yeah, that is what they told me!), so the $3500 was taken back out of my partners account without anyone telling us. The bank charged me a fee for bouncing the $3500 check. We both complained to the bank, but it took threatening to pull our accounts and going to the news media to get them to wipe out all of the charges that occurred because they said the money was in our account and we were dumb enough to believe them.

  35. Anonymous says:

    I had $900.00 in my checking account, $3,500 in my savings account, and $33,000 in a CD account with Bank of America. They still charged me $6.50 service charge one month due to the “linked” accounts falling under $5,000. They claim I cannot ‘link’ the CD account to avoid the fees.

    When I tried transferring my money to my bank here in Hungary, they said I would have to come into the bank since the amount was so high.

  36. Anonymous says:

    I had $900.00 in my checking account, $3,500 in my savings account, and $33,000 in a CD account with Bank of America. They still charged me $6.50 service charge one month due to the “linked” accounts falling under $5,000. They claim I cannot ‘link’ the CD account to avoid the fees.

    When I tried transferring my money to my bank here in Hungary, they said I would have to come into the bank since the amount was so high.

  37. Anonymous says:

    I had $900.00 in my checking account, $3,500 in my savings account, and $33,000 in a CD account with Bank of America. They still charged me $6.50 service charge one month due to the “linked” accounts falling under $5,000. They claim I cannot ‘link’ the CD account to avoid the fees.

    When I tried transferring my money to my bank here in Hungary, they said I would have to come into the bank since the amount was so high.

  38. Nerys says:

    With #2 and #3 I totally agree with #1 your half right and the other half 100% wrong.

    I do not use a register and never will. I do not use checks either for the same reason.

    I SUCK at managing my money. why the hell else would I give a bank money except to TAKE some of the load of managing my money. For over a decade this worked like charm.

    I ONLY used the check card. when there was not enough money something AMAZING happened (10 years ago this was NORMAL not amazing)

    you know the same thing happens when you use a credit card.


    then one day Wachovia Bought First Union. Then one day a few months later I saw an overdraft charge on my account. I was like wait I never wrote a check whats this for. I bought a soda at “wawa” and was 50 cents short.

    Then “forwarded” a loan to me for the 50cents at a cost of $35. I exploded on them. HOW DARE YOU compel me to take a loan from you without my consent! when there is not enough money you DECLINE that charge just like your supposed to just like you have done for 10 years.

    They apologized noted the account and REMOVED this “insta loan” crap from the account. They said someone people would prefer not to get a decline they would prefer the convenience. I replied that anyone STUPID enough to WANT to pay $35 for a $2 soda is out of there cotton picking mind and you should probably not have them as customers.

    She said well if it was your mortgage payment. I said NO you stop right there. Mortgage payments are CHECKS. you can use your visa check card to pay a mortgage payment. They are not remotely comparable. Not even close.

    It was fine for 3 or 4 months then it happened again. Then I exploded again. this went around 3 or 4 more times till they finally said its no longer option. We are not COMPELLING you to accept these illegal extortionist “micro loans” against you will.

    Then it got even worse. I started keeping a small balance in the account to “cover” myself (very very hard for me to do easy to forget like I said I SUCK at this its why I use banks at all) I planed to close the account as soon as possible but I had another 6 payments set for this account and changing them would be a massive hassle (long story) so I figured would muddle through for 6 more months.

    That was not enough for them. They had to find NEW ways to criminally rape people.

    Well when you write a check it has a check number. What happens if check 25 comes into the bank for deposit before check 20 ?

    This created a bit of a problem so legislation was created permitting them to deposit checks in any order received and later in any order they WANTED.

    This created the nasty situation where they would deposit multiple checks in order from largest to smallest.

    If you only overdrew by a TINY bit this would result in say having 10 checks deposit and instead of 9 clearing and one over drawing resulting in one fee you could LITERALLY have 1 clear and 9 overdraw.

    thats 9 x $35

    Now I did not use checks for just this reason then something INTERESTING happened.

    Suddenly all “check card” purchases were starting to get marked as PENDING

    they would sometimes leave them pending upwards of 7+ days! one time 10 days for me!

    thats when they slammed the gates down and started treating check card purchases like CHECKS and “reordering” them after the fact like they do with checks from largest to smallest.

    even GROUPING them in “sets” so “deposits” made during that time would be eaten up by a past “set” of overdraft fee’s so they could charges more fee’s on the rest of the sets! I kid you not!

    I had them take a $12.50 cent overdraw on a purchase at a closing comp usa from one $35 the next morning (rape but I did screw up) into $420 in Fees one day later!!!

    all for $12.50 !!!!

    they actually ERASED the last 10 days transaction and REDEPOSITED THEM in a new order from largest to smallest in 3 “sets”

    why 3 sets? I made 3 “deposits” in that time and they made sure the number of “fees” from the first set was larger than that 1st deposit “after the fact” so when the next “set” hit I was already negative and the entire “set” got charged $35 fee’s EACH and again this set was larger in fees than the last deposit.

    this is how they were able to charge a SINGLE $12.50 overdraft into TWELVE $35 overdrafts.

    Clearly I told them to F OFF. That it would be a cold dark day in hell and I would still NEVER EVER pay a cent of those fees EVER.

    they would not budge (now I know why a short time later wachovia went splat they were desperate for money)

    I deposited the $12.50 I overdrew and left. While I always pay my debts that was NOT my debt. That was a crime.

    I looked it up. its called EMBEZZLEMENT. this is when you are in charge of someone’s money and you “alter and fudge” the records for you own financial gain.

    I GOTO PRISON if I do this.

    They do it as SOP. Literally daily.

    Then she said you should have gotten over draft protection. I turned around and said NOW your racketeering. No seriously just like what they got the mob for. they literally created a racket.

    a racket is when you CREATE a condition of your own making and then “offer” a same said created solution at a price.

    Protection money is a racket. Why? I am going to beat you up unless you pay me protection money. Your paying me from ME to stop me from beating you up or trashing your store.


    you see in the past overdraft was free. IT IS YOUR MONEY in the savings account after all. They would move a fixed X sum over to your checking if you overdrew $50 or $100 or something like that.

    Well this was no good. NOW its $8 PER overdraft and better they will ONLY transfer the PRECISE amount of the overdraft. This way they can charge $8 PER overdraft.

    THAT’S called a racket folks!

    so NO your wrong on #1 the solution is simple


    it worked fine for well over 10 years. Commerce is so far the only bank who has reversed this and allows you the option to SET your account to REJECT overdraws and simply decline the charge.

    Not sure if this will last now that they are TD and they do not have a free account. I refuse to pay them monthly to hold MY money.

    Criminal Organizations. Thats what they are folks.

    Pure Bred Criminals.

    • t325 says:

      @Nerys: I don’t consider banks criminals. A bank has never robbed me of my money because I know how to manage my money. If you don’t know how, learn. It’s not that hard. You have X dollars in your account. You spend Y dollars on a purchase. Now, your new account balance is X-Y. And if you then want to purchase something for Z dollars, but Z is greater than X-Y, DON’T BUY IT!

  39. savdavid says:

    When I was a high school student in 1977 I opened a checking account with Citizens and Southern. Cost to open: $0, cost for first box of checks $0, cost to use teller unlimited times $0, cost of a bounced check $3.00(!), cost for cashier’s check $0, cost for money order $0, statements $0, having your canceled checks sent to you in the mail each month $0, etc.. This was for EVERYONE, all checking accounts were free. They made money making loans off with the depositors’ money and we all got free service. In the late early nineties they were bought by Bank of America and BAM! the fees were slapped on everything and the checking accounts were tiered to give free service for the rich and charges for the low income depositors. In fact, any bank I can think of in town gave free checking in the 70s, they wanted your business.

  40. Anonymous says:

    I work for a bank. Yes, banks do make over half of their money in fees. However, if you are a smart individual person you will be able to avoid fees and all it takes is a little smarts and some research.

    Overdraft fees are simple to avoid. DO NOT SPEND MONEY YOU DONT HAVE IN THE BANK! There are countless upon countless of people that come into the bank with overdraft fees because they spent money they dont have in their account. It is very easy to keep track of your finances more than ever. Banks have a webiste to check your account, you can call the customer service number for free to check your balance, some banks have what is called mobile banking where you can text balance to them and they will text you your balance for free. It is very easy to keep track of your finances and AVOID overdraft fees.

    ATM fees, also very easy to avoid. If you know you are going to be needing cash then make time to go to your banks atm to withdraw money. Also, as a precaution you should always keep at least twenty dollars in your wallet. I know that a lot of people have credit unions and smaller banks that might not have a lot of atms around. The solution to that is to open an account at a bigger bank and have a portion of your check direct deposited into your big bank account.

    Then comes the issue of min balance fees. yes it is true that for some accounts if you dont have a min balance at all times you will be charged. however, there are many ways of waiving that fee apart from just the min balance, like having direct deposit!

    Lastly, if you do have fees if you ask nicely we will be more willing to waive your fees than if you are a jerk to us. if you are always overdrawn then the likelihood of that happening is slim to none. if this is rarely happens, let them know that it rarely happened and explained that it was all a mistake.

  41. mexifelio says:

    Yay, they used one of my photos!

  42. mad3air says:

    Go with ING Direct. No bank fees (charged by ING), overdraft protection (usually 100 bucks or more) and no minimum balance with no maintenance fees.

    Problem solved.

  43. failurate says:

    Kind of odd that people still play the check floating game. Several posts from burned check floaters claiming they were set-up.

  44. says:

    Excess Activity Fee : Several of these savings accounts are limited in transactions as per “federal regulations”, so the banks charges us money if we money from checking to savings or vice-versa after certain no. of times.
    Wamu. aka. Chase dinged me $10/- last month for this thing.

  45. Wim Mulder says:

    Just use a credit union…I got one where I get unlimited debit transactions for free on both my normal checking account and high interest (2.5%) account. And there are no fees whatsoever for normal things. And no minimum balance, plus i have access to any other credit union atm without fee’s across Canada.

    I use coast capital savings credit union

  46. Anonymous says:

    I got a $210 fee from overdrafts… four overdrafts which three somehow got doubled in the computers. Each fee is $30. I had the money in there but they did not see it or something?? I even have free overdraft protection, but after 8 or 9 calls they finally gave me back those 3 computer glitch overdraft fees back, but I really only had one legitimate fee! Principal Bank is usually good, but I was very disappointed about this incident. As a college student, I don’t have an extra $120 (or $210) lying around for their computers to malfunction or for the customer service not to work with me to figure out what really happened.

  47. Amanda Perry says:

    On ATM fees: why not just get cash back at a Point-of-Sale purchase, such as a convenience or grocery store? A little forethought avoids a lot of fees.

  48. Anonymous says:

    I don’t think what you say is true: “Fortunately, the government has pushed back on that sort of behavior”

    Actually my wife just got nailed with $72.00 in fees from Union Bank of California, I analized the way they sort checks and charges and they go from largest to smallest. So where did you get that the Goverment is pushing back on that practice?

  49. Bs Baldwin says:

    When you look for a bank, look for what your activity is. If you hit up the ATM more than twice a week, look for a bank that doesn’t charge a foreign ATM fee (using another bank’s ATM). If you write a lot of checks, look at the overdraft protection that the bank offers. Be mindful of banks that let you use a savings account as OD protection, a fair amount will charge per transfer; along with that, if you transfer more than 3 times a month, it will be a Regulation D violation. Regulation D, Reg D, limits the amount of withdraws from savings and money market accounts; inquire if the bank charges you for Reg D violation, some larger banks do. Be careful of consumer checking accounts, they limit the amount of checks you can write and will charge you for each additional one.

  50. rkort21 says:

    on a Thursday I paid a bill with a check over the phone.They were told not to process the payment til Monday. on Saturday I made a cash deposit at the bank, and made some small purchases over the weekend with my debit card which i could easily cover( or so i thought).
    Come Monday morning I had several overdraft fees. When I questioned the fees,they informed me that on Friday they deducted the amount for Monday’s check and kept it on hold.When asked about my deposit on Sat.they told me that it didn’t go in til Mon.;and not until they first took out for purchases made on Sunday along with fees from those purchases.Fair? I think not.
    what i’m saying is that it’s not always carelessness;the banks are set up this way to take advantage.This is why I hate banks!!