Ever since Bank of America announced it would charge customers $5 a month to use their debit cards, and Citibank said it would charge more people minimum balance fees, lots of people have been writing into Credit.com’s message forums saying that the new fees are outrageous.
"It’s time to PROTEST in front of Bank of America’s building in San Francisco!!! PROTEST BIG BANKS!!!!,” someone with the username Aaron wrote on our site.
Of course, it’s not just BofA and Citibank. Lots of banks are increasing the fees they charge customers, partly to make up for revenue lost due to recent federal rules capping debit card swipe fees.
Short of stuffing your cash into a safe in your basement, what can you do to avoid these fee increases? Here are five fees that are going up, plus tips on how to avoid them.
1. Debit Card Fees
In addition to Bank of America’s big announcement, Chase and Wells Fargo have been experimenting with charging customers monthly fees to access their own money. One way to avoid this fee: Stop using your debit card for purchases. Use your credit card instead, as long as you can afford to pay your balance at the end of the month. Most banks also have gotten rid of rewards programs associated with debit cards, so using your credit card also could help you return to earning points for your purchases.
Also, maybe now is the time to switch back to good old cash?
2. ATM Fees
Most banks don’t charge their customers to use their own ATM’s, but fees to use another bank’s ATM network, so-called out-of-network charges, are rising. You might be able to minimize this by taking out more money at one time from your own bank.Second, hunt for your bank’s ATMs. Even if your bank doesn’t operate a branch near your home or job, it may have ATM’s tucked into unexpected places, like drugstores and malls. Maybe make a map of those locations, or bookmark your bank’s ATM locator website page on your smartphone. That way you can use your own network and avoid ATM fees.
3. Increased Checking Fees
Many banks are making it more difficult to get free checking. They may require you to keep more money in your checking account, or require you to have multiple accounts with them.
This may be a hassle, but it’s not insurmountable. If you have accounts at more than one bank, consider consolidating them at one institution. This may get your checking account balance over the minimum threshold, or meet their requirement for multiple accounts.
You might need to do a little research. If you have accounts at two different banks, maybe neither one will offer a free account, even if you do all your banking with them. Shop around for a third.
“If you shop around you may be able to find a bank that meets all your needs without charging as much in fees,” says Beverly Harzog, Credit.com’s credit card expert.
4. Bounced Check Fees
Many banks are charging people more when they bounce a check; the average is now $30.83 per bounce.
The simple advice: Don’t bounce checks. But if that worked, no one would be paying such fees in the first place. Still, you might be able to do a better job tracking your spending to avoid such charges.
If you’re doing your best and still worry you might keep racking up bounced check fees, consider switching to a credit union or local bank where the fees aren’t as high.
5. Overdraft Protection
If you overdraw your account by making purchases or using your debit card, many banks offer overdraft protection to cover it. This allows the purchase or the withdrawal to go through, but it also hits you with a fee of around $34, according to the Center for Responsible Lending.
Beginning in 2009, federal rules required banks to get customers to opt-in to such protection. Given the high fees such protection plans charge, many banks responded with major marketing campaigns that encourage people to sign up. But instead of offering useful services, “the banks succeeded in confusing and wearing down some of their customers to the point that they accepted a product that would ultimately cost them unnecessary, exorbitant fees,” according to the center.
Here’s the good news: Avoiding such fees is simple. Just don’t sign up for overdraft protection.
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Christopher Maag Credit.com’s Reporter, Chris graduated with honors from the Columbia University Graduate School of Journalism, and has reported for a number of publications including The New York Times, TIME magazine and Popular Mechanics. Reach Chris via email at chris (@) credit.com.