You’d think a multi-billion dollar bailout would be enough for most banks, but no – they’re still in search of cash and they’re targeting OUR pockets! According to Smart Money magazine, banks have been quietly raising fees amid the flurry of mergers and other economic chaos. So, here’s what you need to do in order to avoid them.
- Overdraft protection. Banks charged customers over $17.5 BILLION in overdraft fees last year. According to Elizabeth Rowe, director of banking advisory services at Mercator Advisory Group, that number is likely to rise. Why? Because banks process checks and debit purchases according to their value - in order of the highest amount to the lowest amount of money spent. Not sequentially. So, that $100 pair of shoes you bought yesterday is likely to be processed before the $15 you spent at the grocery store two days ago. So, if you have enough in your account to cover the groceries, but not the shoes, you’re out of luck. Also, you’re likely to have multiple overdrafts - and multiple overdraft fees at $29 a pop! Rowe says banks have set up this quicksand model on purpose. To protect yourself, link your checking and savings accounts. That way you’ll be covered if you temporarily overdraw your checking funds.
- ATM fees. You probably wouldn’t agree to a 17% interest rate on a $20 loan, but that’s exactly what you can expect to pay when you use another bank’s ATM. Up $.50 cents from last year, the average total charge when you use another bank’s machine is now $3.50. If you can’t find your bank’s ATM nearby, use your debit card to get cash back from a retailer – which won’t cost you anything.