How to Fight Back With Bank Fees

In the current economic environment, where lawmakers are setting their sights on tighter restrictions on the financial industry’s abusive practices—from excessive overdraft charges to out-of-control interest rates— banks appear to be fighting back with higher fees.

According to The Wall Street Journal, “industry leaders like Bank of America Corp., Wells Fargo & Co., HSBC Holdings PLC's HSBC North America, Fifth Third Bancorp and others are experimenting with new ways to nick their customers, from imposing maintenance fees on checking accounts to rolling out new charges for services like fraud alerts, debit cards and credit reports.”

This news should matter to anyone with a bank account. Even though new rules mean banks must fully share any new fees with their customers, these institutions can do so in what WSJ calls “the ordinary-looking correspondence that most consumers toss in the trash without reading. The result: Many people will learn of the new charges only after opening their monthly statements.”

Customers should remain vigilant. Even customers who keep low balances and manage their accounts responsibly can be hit with so-called “penalty fees.” Here are some things to look out for and things you can do to fight back against excessive banking fees

Checking Fees
In this new wave of banking fees and costs, free checking may be the first to go. Instead, some banks are implementing monthly fees for keeping an account open, ending what has been years of free checking options for millions of customers and a major bank enticement meant to persuade people to do more types of business with their bank. If your free checking goes the way of the dinosaur, one way to get a better deal on checking fees is to do a lot of business with your bank—from mortgages to car loans. For some banks, this added activity will be an incentive for your bank to waive your checking fee. If worse comes to worst, there’s always the option to move your money. Shopping around for a better banking experience can not only mean free checking but also a better ongoing relationship with a community bank.

In addition to checking fees watch out for those fees related to checking account woes, including:

Maintenance Fees
As mentioned, checking account maintenance fees are becoming the new banking standard. In addition to doing more types of business with your banks, sometimes banks will waive these maintenance fees when you keep a minimum balance, combined balances in several accounts, or even when you use direct deposit.

Debit Fees

Often banks will require you to use your debit card a certain amount of times in order to avoid debit card fees. To offset this, often banks will match these transactions with cash back, often deposited directly into a separate savings account. Check into your bank’s  options.

Interest
Historically, bank accounts with low fees don’t pay any interest. This give and take is typical. Keep this in mind when setting you accounts for the long haul. Often, your money is better housed in a different account.

Rewards
Similarly, accounts with the lowest fees typically don’t offer rewards. Check with your own bank about different rewards; but always read the fine print as often in the financial world, “reward” is bank code for “to the customer’s ultimate detriment.”

Minimum Deposits
The Wall Street Journal also warns that banks may raise minimum initial deposit requirements to encourage people to keep more of their money in their coffers. Again, when opening a bank account in this tough economic climate, it’s best to do your research and shop around.

And, as always, a little due diligence now can go a long way later. Happy banking.