Top bank fees and how to avoid them

Banks these days are piling on the fees. Some are hidden and some are obvious. We can all do our part to avoid them. I despise bank fees unless I get more than that value back from it. With a little research and planning we can save hundreds of dollars per year. Here is the list:

  • Monthly Service Fee: Some banks charge you monthly just for having the account. This is ridiculous. Solution: Switch your account to a free account or change to a bank that offers one. Average Savings: $10/month ($120 per year)!
  • Overdraft Fee: All banks have this fee. They make a fortune off of them too. The average is $30 per transaction. Solution: Use automatic payments, online bill pay. STOP USING CHECKS! Online bill pay can send checks to any person or business and it is free. No envelopes or stamps needed. Having and overdraft line of credit is a good idea too!
  • Overlimit Fee: This applies to credit cards. You get hit with a fee of up to $39 if you go over the spending limit even if it is only $1! Solution: Set up email and/or text message alerts for when you get within $100 of your limit. See my post about setting this up here. There is no need to pay this junk fee!
  • Late Payment Fee: This applies to loans and credit cards. Also includes utility bills. Solution: Set up automatic payments or online bill pay so that they are all paid on time. This also saves you interest in the long run!
  • Annual Fee: This applies to credit cards. They are a lot less common these days but are still in existence. You must gain a tangible benefit that is worth more than the fee in order to justify it. Solution: Most credit card companies have a card that does not carry an annual fee. Switch to that type of card by calling them. This can save $50-100 per year or more!
Most bank fees are needless profit centers for them. They rely on laziness and ignorance to make lots of money off of people. Everyone should evaluate the fees they pay each year as part of a comprehensive annual personal financial review. Are you spending needlessly on bank fees?