Posted by DebtKid :: April 15, 2008 @ 2:40 pm
It's not just gas prices anymore that are out of control...
With banks' lending divisions struggling across the country, many banks are looking to bump their bread and butter: fees.
Across the pond in the UK, the average overdraft fee is an outrageous $57, and it might be only a matter of time before higher fees hit the US. British consumers are fighting back, launching lawsuits against the top 5 banks in Britain. Some $810 million was refunded to British customers in the first half of 2007 because of the litigation. Will lawsuits soon be coming to the US?
US consumers paid $38 billion in bank fees in 2007 alone. $38 billion!
Here's 5 ways to beat bank fees (or at least avoid them!):
1. Keep a cushion
Try to keep a cushion in your checking account. You don't need a $10,000 cushion, but keep a little extra in your checking account and pretend it's not even there. You'll lose a little in interest, but could save yourself big in the overdraft fee department.
2. Pick up the phone
By picking up the phone and calling your bank's customer service line you can often get fees waived. Be nice and ask politely to have the fee removed. More often than not, many banks would rather keep you as a customer than lose you over a $34 fee.
You might have to repeat your fee waiver request twice. The first time most customer service reps will tell you they can't waive fees. Ask politely again, and after a trip "to ask my supervisor" you'll probably get the fee waived.
3. Limit your accounts
Do you really need 4 types of accounts at your bank? Some accounts have monthly maintenance fees that apply if you don't keep a certain balance or hit other requirements. Look closely at your accounts and see if you might be better off switching within the bank. Go into a branch and talk with a banker about the best options for your financial situation.
4. Settle for half
If you have a few hundred dollars in fees (i.e., you kept using your debit card for days after the balance was below zero), you're normally not going to get them all waived. What you can do is ask your bank to split the difference.
I once had over $400 in overdraft fees (long story), and my bank agreed to waive half of them to keep my account. The last thing the bank wants is an overdrafted-into-oblivion account. Ask if they will split the fee in half and you'll have at least some success.
5. Consider a credit union
Many credit unions have established extensive no-fee ATM networks these days. Check out your local credit unions and see if making that switch makes sense for your situation.
Source: BusinessWeek.com
9 Comments
Hear hear on number 5: Consider a Credit Union.
Why would anyone choose to do business with a corporation/market that openly tries to squeeze as much money out of you as possible, when there is an alternative non-profit version?
I wish I could use a non-profit cell phone and a non-profit airline, but alas I cannot. However, when I finally got sick of banks nickel-and-diming me I switched to a credit union. Sweet relief.
#5 is great. The others are also true to protect yourself from a company that is trying to rip you off. But I really don't want to support a company that is trying to rip me off - even if I manage to foil there attempts. When their primary goal is to rip me off, I would rather not deal with them at all.
And tell the Credit Union you are choosing them because of the horrible behavior of banks and that you expect them to behave ethically. Some credit unions seem to get the idea that what banks are doing justifies them being similar but not quite as bad.
The price of an overdraft in england is 57 dollars because of the exchange rate. That would make it about 20 euros. Sigh.
CUs and banks all operate on the same principal. They are all fractional reserve banking. They make all their money on fees and loan interest from money that is not even theirs. I suggest everyone make a national run on banks day. Remove all your money from the bank. Everyone on the same day. Bring the whole system down. Lets be done with it.
Re: jekyllya
Considering that many people have more loans to pay than available savings, getting even with the banking system may prove to be a bit hard to really pull off.
I don't have much sympathy for someone paying an overdraft fee. It is quite simple to prevent -- don't spend money that you don't have. Period.
I have paid them a few times in my life, but I never blamed the bank for the charges or any other external factors. It was my fault and I took measures to never pay overdraft fees again.
People complain about the fees, but if the banks could not charge the fees, people who overdraft would soon find themselves without a bank account.
It's not just overdraft fees. Some banks charge a fee if you come into the bank and deposit money instead of direct deposit or using the atm machine. Some charge for online banking, some for using the atm machine. On my business account, I pay a fee if I am over a certain number of items and each check on a deposit is considered an item. I don't blame the banks but it can save you money to shop around for your banking choice. Know what fees your bank charges so you can avoid them.
#6 - Good for you. Gee, whiz kid. How about this situation: God forbid you make a mistake after banking perfectly for years, and forget to enter a 63.00 debit transaction. Then, the transaction comes in on the same day you make several small purchases. Like one for 5 dollars, a few for 10, a few more for 7 or 8, maybe a coffee at Starbucks, then... the bank looks at all of those charges at the end of the day, and instead of using your funds to pay the smaller purchases first, and then giving you on overdraft charge for the larger amount, they pay the larger amount with funds, and then charge you several overdraft charges (my example would be nearly 250 dollars ) amounting to multiples of the amount charged. That is just bullcrap that banks now do that very thing to F you over as much as possible for a slip up. Seems to me banks were doing quite well several years ago, when they had a limit to how much of a fee you could be charged on any given day, and, had penalties of 10 dollars or so tops for each offense, and also would just f'n deny your credit card transaction for 2.50 instead of turning that into a 28 dollar profit. But I know, I know. The sympathy all goes to the poor perfected Banks who never make mistakes like PLP.
I agree that banks have gotten way out of control with their fees. I, too, resent the fact that they'll clear the one larger amount and bounce the subsequent smaller ones rather than clear the lesser amounts first. My husband's checking and savings accounts were hacked into and they continue to charge the damned fees by the day! I personally think it's an inside job by the bank but try proving it! Bank practices suck, period!
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