How to Avoid Bank Fees
According to CNN Money, many banks are making millions each year off of bank fees. Many of these fees are unnecessary, meaning they could be easily avoided with a little knowledge and planning. The following are examples of the most common unnecessary bank fees along with tips for avoiding them.
Minimum balance fees: These fees are applied when your account drops below a minimum balance on any given day during your monthly statement cycle. Some banks base these fees on your average balance, which means your balance can drop below the minimum on any given day as long as your average balance during your monthly statement cycle remains above the minimum. Some banks let you combine balances from multiple accounts to avoid a minimum balance fee. At ENB, we like to keep things simple, which is why we offer 3 checking accounts that do not require customers to maintain any minimum balance to avoid a fee.
Overdraft fees Banks and credit unions charge overdraft fees when customers spend more than is in their checking account. This is the bank fee that typically gets people the most upset. It’s also one that can be avoided in multiple ways. When a customer overdraws their account, the bank will often allow the overdraft and pay the item. This is done as a customer convenience, but it does trigger an overdraft fee. Customers can opt out of allowing overdrafts that are the result of debit card transactions such as purchases at a store or online as well as withdrawing funds at an ATM . By doing so, their bank will simply deny a transaction for an amount that is more than what they have in checking. In this scenario, a fee will not be charged. Many online finance “experts” and bloggers recommend this as a great way to go. What they fail to mention is that not all overdrafts are created equal. Having your card declined due to overdrawing your account while purchasing a gallon of milk at the local convenience store is much different than being declined while checking out at the grocery store with a full cart and 5 people in line behind you. One way to avoid this situation and still avoid overdraft fees is to sign up for overdraft protection with your financial institution. Whenever your account is overdrawn, they will automatically move money from either a savings account or a line of credit to cover the amount of the shortfall. Some institutions charge for these transfers, but the fee is significantly less than an overdraft fee. Another way to avoid overdraft fees is by signing up for account alerts. Many banks, including ENB, allow customers to sign up for alerts via text or email which let them know when their checking account balance is low and putting them in danger of overdrawing. Customers can then transfer funds as needed to keep that from happening.
ATM fees Using an ATM owned by a financial institution other than your bank can result in surcharges from the ATM owner and service charges from your bank. The easiest way to avoid these fees is to use your bank’s network of ATMs. Sometimes this is easier said than done. When choosing a bank, research where its ATMs are located and determine if one or more are convenient for you. Also look to see if they offer expanded access to free ATMs through partnerships with ATM networks. For example, ENB partners with the STAR Network so our customers can avoid paying ENB service charges at any STAR ATM.