Over the past few years, the bad banking habits of consumers has come to the forefront as banks have raised their fees for nearly every infraction they could think of. Mistakes that used to cost you a couple of dollars now can decrease your bank account by a significant amount before you even know what is happening. These banking fees contribute billions to the banks bottom lines every year, allowing the banks to pay their top executives multimillion-dollar salaries while draining the bank accounts of the average consumer. There are certain banking mistakes that can cost you a lot of money very quickly, and it is important to know how to identify them so that you can avoid them at all costs.
Overdraft Protection On Your Account
Overdraft protection is advertised as a way for bank account holders to avoid the embarrassment of declined debit cards and bounced checks by allowing these transactions to go through and placing the account into a negative balance state. It sounds like a great idea at first, until you realize that each transaction that you make over the balance available triggers a very expensive fee, often up to $35 per occurrence. This means that 3 $5 charges made before you realize your balance is low could cost you $105 in fees. Changes in federal law has now made it where you have to opt into this service (the banks cannot automatically enroll you anymore), so you should probably consider opting out of this expensive service and having your charges declined if you do not have enough money in your account to cover them.
Not Meeting Minimum Balance Requirements
The days of free checking are nearly gone, with many banks now charging a monthly maintenance fee for all non-interest bearing checking accounts. However, these same banks will waive the fee if you maintain the minimum balance requirements for the account at all times. Review the terms and conditions of your account to see what the minimum balance amount to avoid maintenance fees on the account is and be sure to keep this amount in the account at all times, as a single slip under the limit will trigger fees for that month. If you cannot maintain the minimum balance easily, consider changing your bank account to something more suitable for your financial needs.
Using Out Of Network ATMs
Banks want you to use their ATMs instead of bothering the tellers, whom they have to pay a salary, but they penalize you if you use another bank’s ATM to withdraw money from your account. In many cases, you are charged a fee by your bank and an additional fee from the bank that owns the ATM used. These fees can add up to around $5 per occurrence, adding up quickly if using an out of network ATM is a routine habit. Many banks now have their ATMs in alternate locations, such as parking lots, convenience stores, and gas stations, to make it easier for their customers to find a fee-free ATM to use.