Learn about our 11 best ways to avoid bank fees, so you never pay another dime for a free service!
Banks make a lot of money charging fees that range from $1 to $35 to their clients. Even if they don’t seem expensive individually, accumulating them will affect your savings in the long run.
1. Open New Bank Accounts
Few traditional banks are charging up to $12 per month for them to maintain your checking or savings account. If you are in this situation, it is time to take action and save some money!
In 2019, no one should have to pay a fee to have a bank account. So take a look at banks that offer free bank accounts when you follow one of these rules.
For example, you can set up a direct deposit or keep a minimum balance in your checking account. Similarly, you can set up a monthly automatic transfer or keep a minimum balance in your savings account.
If you can’t meet any of the requirements, you should consider joining an online bank that won’t charge you any fees.
2. Only Spend The Money You Have
The best tip to avoid bank fees is to spend less than what you have. So, keep track of your transactions and account balances to avoid overdraft fees.
Also, you can take some time to identify your monthly expenses and make sure to keep enough money in your bank account to cover them. Otherwise, you will be charged a $35 overdraft fee by your bank. Besides, if you keep a negative balance, you will be charged an extended overdraft fee on top of it.
It can quickly add up if you don’t pay attention to your balance. So, don’t spend more money than what is in your bank account. In the meanwhile, ask your bank to decline any transaction if you have insufficient funds.
According to the FDIC, in 2017, banks have collected $11.45 Billion in overdraft fees.
3. Sign up for alerts
Signing up for bank alerts can become handy in various situations. They allow you to know when you need to take action in your bank account. We recommend our clients to set up for the following alerts.
- Low-balance when your account balance is near the minimum balance
- Available account balance to know if you have the sufficient funds to make your purchase
- Credit card or debit card used online to decline any purchase you didn’t make
- Unusual account activity so you can freeze your account if someone else gains it control
4. Go Paperless
Another way to avoid bank fees is to go paperless. In short, you will receive your bank statements online, not on paper. This strategy has four advantages.
- You will save between $2 and $3 by not paying a monthly fee
- You won’t have to find extra storage at home to store your records
- It will reduce the probability of identity theft since you won’t receive anything into your mailbox
- It will help preserve our environment by reducing our paper consumption
If, for any reason, you need your statements on paper, print them at home to save some money.
5. Don’t Pay International Fees
Another recurrent fee that banks are charging to their clients is known as international fees or currency conversion fees. They collect those fees when you use your credit card abroad, or you withdraw money in foreign ATMs. They can vary between $1 to $5 for each withdrawal and between 1% to 3% for each transaction.
The best ways to avoid paying those foreign fees are the following.
- Open a bank account that is free of charge on foreign transactions or withdrawals
- Find out if your bank has partnerships with other banks, so you don’t pay for using their ATMs
- Get a credit card that has $0 foreign transaction fees
- Use a currency exchange service to get foreign money before your trip
- Leave your debit card home to make sure you won’t use it
- If you have friends or family living in the country you are visiting, transfer money in exchange for cash
6. Only Use Your Bank’s ATM
It might be clear to you, but withdrawing money from an ATM not owned by your bank will cost you money. Your bank will charge you between $2 and $4 as a non-network ATM fee. It is a flat fee, so if you are withdrawing $20 or $1000, you will pay the same amount.
The best ways to avoid paying those ATM fees are the following.
- Always have cash in your wallet in case you need it
- Do a quick google search to see where is your nearest bank ATM
- Open a new account in a bank that has a lot of ATMs where you usually need it
- Plan by withdrawing cash before traveling to a place that don’t have any of your bank ATM (like Hawaii)
- If you can’t find any of your ATMs but need cash, withdraw more money than you need, so you don’t have to pay a fee multiple times
7. Make A Transaction Regularly
If you don’t use your bank accounts regularly, you may have to pay a monthly inactivity fee that can range from $10 to $20.
We know it is easy to forget about an account if you are not using it frequently. But you should have a plan to make sure you don’t pay this inactivity fee.
The accounts that are the most impacted by inactivity fees are the savings accounts. It is because we only need them in case of an emergency.
However, with a little bit of planning, you can easily avoid paying those inactivity fees. For example, you can set up an automatic monthly transfer to your account. Another way would be to go to an ATM, withdraw $20, and deposit them back into your account. Or, more radically, you can transfer your balance to another account and close your account.
8. Never Exceed Your Transaction Limit
Sometimes, accounts like savings and money market accounts have a monthly transaction limit.
If you exceed this limit, you will have to pay a fee that varies between $3 to $25. It will generally start low, but the more you withdraw money, the more it will increase.
So, first, you need to identify the accounts that have a monthly transaction limit. Then, you need to stop using those accounts for everyday transfer or withdrawals. However, if you need your money, make a higher monthly withdrawal instead of many.
9. Don’t Use Checks
Another way to avoid bank fees is to stop using checks. Most banks will give you a checkbook for free and then will charge you for any extras.
The only time you should use a check is for setting up a new direct deposit. Any other time, you should use a credit card.
However, if you still need checks, open an account at an online bank that will give them to you for free.
10. Don’t Close Your Account
If you open a new bank account, some banks need you to keep it open for a certain amount of time. If you close it before the end of the required period, the bank will charge you for an early account closure fee. This fee can go up to $25.
To avoid paying this fee, make sure to track the date when opening a new account. That way, you can double-check that you won’t be charged a fee before closing an account. Generally, you need to keep your account open between 3 to 6 months.
11. Avoid Asking For Debit Card Replacements
Most banks collect fees every time you replace your debit card before its expiration date. It can range from $5 to $10 but, for express shipping, you will have to pay an extra $15 to $25.
So, one easy way to avoid paying this fee is to keep your debit cards at home and use your credit cards instead. The probability of losing your card or having it stolen will be lower.
But if you have to replace a debit card, make sure to find an intermediate solution to not pay for express shipping.
In conclusion, you can think about bank fees as paying for a free service. Who would want to do that? So now, it is time for you to follow a few of these 11 tips to avoid paying bank fees.