It seems there’s a fee for everything. It can be hard to keep track of all of the bank account fees, credit card fees and convenience fees consumers are charged – and it’s even harder to know which fees can be avoided altogether.
“In many cases, people don’t realize how much they’re paying out, as the charges are automatically deducted from checking accounts or tacked onto credit card statements. It can seriously add up from month to month, year to year,” said Mike Sullivan, chief education officer for Take Charge America, Inc., a national nonprofit credit counseling and debt management agency.
Sullivan outlines seven fees consumers should avoid:
1. Checking account fees: Consumers who pay a monthly or per-check fee should consider switching to a free account. Many online banks, credit unions and traditional banks offer truly free checking.
2. Low account balance fees: Many banks charge fees on accounts that fall below a required minimum balance. This fee is a waste, as there are plenty of institutions that don’t set a minimum.
3. Inactivity fees: Some banks charge clients for inactivity, automatically deducting funds from an account that hasn’t been used over a specified period of time. It’s better for consumers to switch banks or close their accounts rather than pay inactivity fees.
4. ATM fees: Consumers shouldn’t pay money to get money. They can avoid this fee by simply planning ahead and using ATMs at their own banks, or switching to a bank or credit union that reimburses fees.
5. Overdraft fees: Overdraft fees can add up quickly – with disastrous effects. Better record-keeping and cash flow management can help consumers avoid these fees and hold onto their hard-earned money.
6. Credit card fees: Many credit card companies charge an annual fee, usually to the tune of $50 or more. Consumers should consider transferring balances to low-interest, no-fee cards, and close the credit cards with annual fees. Moreover, consumers who are racking up over-limit or late fees may want to consider signing up for alerts warning them when they’re nearing their limit or due date.
7. Extended warranties: Warranties are usually offered on pricey items such as computers and televisions, but they’re not a good use of money. Many big-ticket products already include a manufacturer’s warranty, and consumers who use credit cards with purchase protection will have that safety net, too.
For more financial tips, visit www.takechargeamerica.org.