How to Avoid Bank Fees
Bank fees are annoying.
Although they might seem small, you’re paying several different types of fees every month. Compounded over a few years, this could work out to hundreds of dollars. According to the Federal Reserve’s recent financial study, the average American pays $250 per year on banking fees.
So you might be wondering, what are some ways you can avoid monthly bank fees? This article covers four valuable tips on how to avoid bank fees.
1. ATM fees
It costs thousands of dollars for banks to set up and manage ATMs. So they make a profit by charging a small fee for every transaction that consumers make. The average cost per ATM transaction is around $3.08.
This figure is just expected to increase. For many customers, it feels like you’re paying a premium just to access your money on the go. So why are ATM transaction fees so high?
Firstly, peer-to-peer payment apps are on the rise. Combine that with the fact that most people don’t need to go to the ATM because you can just pay with a card, and it’s clear why banks are struggling to profit with ATMs.
So when fewer people are using those ATMs, banks increase transaction rates to make up for their losses.
Another reason why ATM transaction fees are high is that they don’t alienate customers. For example, if maintenance fees are too high, it might cause customers to turn to a different bank. But ATM usage is optional, so customers get to decide if this convenience is worth the price.
So how do you avoid bank fees? Well, whenever you go to the grocery store, request cashback using your debit card. Most stores don’t charge for this, so it’s a free way to withdraw money.
2. Maintenance fees
Maintenance fees are what you pay your bank for simply keeping your account open.
The cost of this fee depends on your bank. But many checking accounts charge up to $15 per month—or $180 per year!
Maintaining your account is an expense for the bank, so they make their money back by charging maintenance fees.
However, like with ATM fees, avoiding maintenance fees is super straightforward. Most banks won’t charge maintenance fees if your account meets a few basic requirements. These requirements may include:
- Maintaining a minimum amount of cash in your checking account
- Setting up direct deposit
- Using your debit card a certain amount of times per month
These requirements may vary. However, it’s quite standard.
You can also avoid maintenance fees by using a Juice Banking payout card. This payout card doesn’t charge any fees regardless of whether you have $1,000 or $5 in your account.
3. Overdraft fees
Overdraft is simply withdrawing more money than your account currently has. Fortunately, most banks will loan you a certain amount of money to cover your costs, and you’ll have to pay it back.
Let’s say you have $200 in your account, but your bill is $250. Instead of declining the payment, your bank will let it go through.
Overdraft fees vary from bank to bank. However, most banks charge an overdraft fee of $35. This is only for one transaction. If you continue making payments throughout the day, fees can quickly add up.
One of the best ways to protect yourself from overdraft fees is to ensure your bank account has the money required to make a purchase. So if your bill is $250, use your bank’s mobile app to check if you have enough money.
Another way to avoid paying overdraft fees is to create a detailed budget at the beginning of every month and stick to it. This doesn’t only prevent overdraft fees, but it will help you cut down on unnecessary expenses and invest that money instead.
4. Wire transfer fees
If you employ a few people, then wire transfers are an easy way to send money fast.
However, the bank does quite a bit of work to process these transfers, so they charge a hefty fee. Domestic payments can set you back up to $20, while international payments cost around $35.
So if you’re an employer and want to avoid paying wire transfer fees (and making your employees pay them), opt for a Juice Banking payout card. You can pay your employees without having to pay annoying fees to your bank.
Save money and avoid banking fees
Although bank fees won’t go away, you can implement some valuable tips and techniques that’ll prevent you from paying any unnecessary fees. Habits like budgeting, planning for the long term, and keeping a watchful eye on your account balance can easily save you hundreds of dollars per year.
If you’re interested in avoiding all these fees while getting access to free banking perks, consider getting started with Juice Banking.