The global COIVD-19 pandemic is impacting not only the health of many across the world, but also their wallets. In fact, according to a recent study, “one-in-four adults have had trouble paying their bills since the coronavirus outbreak started, a third have dipped into savings or retirement accounts to make ends meet, and about one-in-six have borrowed money from friends or family or gotten food from a food bank.” As such, many Americans are stressed out when it comes to their finances, and the last thing they need is extra bank fees when they are trying to get by.
As many have experienced, money can often be a source of tension and anxiety. When I was a child, my parents went through a divorce. My mom owned a small business that was having financial troubles, and one day I found her on the floor of her closet sobbing because she didn’t know how she was going to be able to pay our bills. Since that moment, I’ve wanted to help and empower people to take charge of their finances.
Now that I’ve worked in finance for over three decades, I’m here to help you avoid bank fees, so others don’t have to experience the anguish and anxiety that my mother did. The following are a few simple tips and tricks to avoid these pesky bank fees to ease your mind and wallet.
- Ditch Your Checking Account
The average checking account charges an annual cost of $97.80. Many large, traditional financial institutions charge for basic checking services. However, many consumers rarely write checks due to technology that enables direct transfers and peer to peer payment systems.
Take a look at how much you’re are paying in these fees and evaluate if this amount is worth the cost. If the cost is too high, consider finding a different bank that will charge you less or ditch the account altogether.
2. Make Sure to Account for Maintenance Fees
Your bank may also be charging you a maintenance fee. The large U.S. banks charge about $10-12 per month for the most basic account, and they earn interest on your balances.
If you are looking to ditch or reduce these fees, consider switching to a smaller bank or online option.
3. Ready or Not, Here Come ATM Fees
Your hairstylist only accepts cash, so you pop down the street to the nearest ATM machine. Before you insert your debit card, be sure you know how much your bank charges for these transactions. Since fewer people are using cash and we head toward this new “cashless society,” banks are hiking ATM fees and as a result, these fees reached a record average of $4.72 last year.
To avoid these fees, ask if they are open to digital cash options instead. However, if you must use physical cash, go to your bank-owned ATM or try getting cash back at a local grocery store (many do this at no cost).
4. Times Up for Overdraft Fees
Lastly, all the fees above can add up. If you aren’t watching closely or incur an unexpected expense, you may accidentally overdraw your account. The median overdraft fee is $34 and if you don’t correct it right away, you may be charged with an extended overdraft fee. This median cost for this second fee is $15(that’s almost $50 total).
To account for these fees, keep a close eye on your account and make sure you know what you are being charged for all the fees above. You can also ask your bank if you can opt-out of automatic overdrafts or look for accounts that don’t charge for these fees.
In this pandemic-stricken work and heightened times of hardship and economic turmoil, the last thing struggling Americans need is hidden bank fees. It is time to take back control of your finances and watch out for the sneaky fees outlined above. I hope these tips and tricks will give you back your hard-earned dollars and shrink these charges.