Big Bank Fees Are on the Rise: 3 Ways to Chop Those Charges

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Bank feesAfter the government -- and thus, the people -- bailed out big banks in 2008, you'd think those institutions might have returned the favor by treating their customers better. Instead, banks are doing their best to boost their incomes any way they can.

And a recent survey from Bankrate confirms what most bank customers already know about just how those banks are doing that: Fees are on the rise.

ATM fees hit a record $2.50, with every single bank surveyed imposing fees on non-customers. Tack on the fees that your own bank may charge for going out-of-network, and the tab rises to more than $4.

Meanwhile, fees for checking accounts are also on the rise. Monthly charges for basic non-interest checking accounts soared 25%, while minimum balances to avoid fees were also up. Average overdraft fees rose above $31 this year to a new high, but the most common amount charged was $35.

Still, consumers are not defenseless. A few simple moves can save you from having a ton of cash sucked away by surcharges.

If you're tired of big bank fees, you've got a number of options. Here are three things you can do to keep more of your money in your own accounts.

1. Get preferential treatment.

Those high fees may be the baseline, but most banks give you a way to get out of having to pay them. Sometimes, it means keeping a minimum balance in the account. But with other banks, all you have to do is arrange for your paycheck to be direct deposited into your account, or have a certain number of debit card transactions each month. If you can demonstrate that you're a good potential customer, your bank will treat you right.

2. Threaten to switch.

The exodus of accountholders around last year's Bank Transfer Day surprised many banks. While you may think of your local bank branch as just another cog in a massive corporate machine, individual branch managers are able to use incentives to keep good customers from leaving. Talking to bank personnel about a bad fee experience could get a costly fee waived or reduced, especially if you have the leverage to make good on a threat to go elsewhere with your money.

3. Give up the interest.

It may seem counterintuitive to move out of an interest-bearing account, but the Bankrate survey showed that checking accounts that pay interest have nearly triple the average monthly fee versus non-interest accounts and a whopping eight times the minimum balance necessary to avoid fees. Considering the interest you'll get is often less than 0.1%, you're not giving up much to save big.

In tough times, you can't afford to let banks siphon off your hard-earned money. Take some simple steps and let banks look elsewhere for fee income.



You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger.

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70 Comments

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Boatnmaniac

The best way to avoid high fees? Two words: Credit unions.

September 25 2012 at 4:58 PM Report abuse +1 rate up rate down Reply
Susan

Easiest way to chop those charges? LEAVE! Easy, peasy!

September 25 2012 at 4:10 PM Report abuse rate up rate down Reply
skutch1

i love how banks charge us for letting them use our money to loan out to other people at a high interest rate while paying us dick in return.

September 25 2012 at 3:48 PM Report abuse rate up rate down Reply
Ronald

Big banks are not for small people. Seek other financial institutions that do not exploit the hell out of you.

September 25 2012 at 2:26 PM Report abuse rate up rate down Reply
tracystv

And, do not forget that you can always switch to a credit union!!! Switching is not as hard as everyone is saying it is.

September 25 2012 at 1:26 PM Report abuse rate up rate down Reply
rjbhighc

What ever happen to the new Laws Congress put in place curtailing fee Banks can charge . Again as so many times the Bank Lobby winn the day AGAIN in favor of the Banks . The Banks always find a way to get every Dime and nickel from what they call "OUR BEST COSTUMER" , yeah sure .
As said many times before A local Credit Union looks real good AGAIN . Big Banks care very little about the Folks the claim to serve .

September 25 2012 at 12:32 PM Report abuse rate up rate down Reply
2 replies to rjbhighc's comment
vandation

Don't you know ? By and large the government will put up with the shenanigans of the Banks, Large Corporations, Unions ...... as long as they get "their cut".

September 25 2012 at 5:18 PM Report abuse rate up rate down Reply
vandation

Don't you know ? By and large the government will put up with the shenanigans of the Banks, Large Corporations, Unions ...... as long as they get "their cut".

September 25 2012 at 5:20 PM Report abuse rate up rate down Reply
JimB

The problems is the BANKS have the rights to make changes and time they want and for any reason they want ..... When you open a account with a financial institution it is a CONTRACT and can not be changed while in effect, right ..... WRONG ..... As stated, financial institutions they can change it any time, and for any reason, they want ..... If you entered into a contract with someone and tried to make changes you would end up in court and losing ..... SO, WHY CAN'T BE THE SAME WITH FINANCIAL INSTITUTIONS ..... IF YOUR CONTRACT, TO OPEN A ACCOUNT, SAY YOU WILLL RECEIVE FOUR (4) PER CENT INTEREST A MONTH THEN YOU SHOULD RECEIVE FOUR (4) PER CENT A MONTH INTEREST AND SHOULD CONTINUED TO RECEIVE THE FOUR (4) PER CENT INTEREST A MONTH UNTIL THE ACCOUNT IS CLOSED ..... THEY CAN TO DO THIS BECAUSE WITHOUT CONTROL THEY CAN NOT PAY ALL THE MILLIONS TO PEOPLE WHO RUN THE INSTITUTION AND ALL THE PARTIES THEY HAVE ...... IT IS YOUR MONEY NOT THEIRS ..... AND THE U.S. CONGRESS AND U.S. DEPARTMENT OF JUSTICE SHOULD PROTECT YOU AND NOT THE FINANCIAL INSTITUTIONS .....

September 25 2012 at 12:18 PM Report abuse rate up rate down Reply
1 reply to JimB's comment
theycallmeroy3

There's no rule written in stone banks have to pay you for putting funds in there bank, especially in an economic downturn.

September 25 2012 at 1:12 PM Report abuse rate up rate down Reply
lovbuton

Dump the big banks and go to a credit union!!

September 25 2012 at 10:53 AM Report abuse +2 rate up rate down Reply
simpljb

are you kidding me ? - you think the banks , the very institutions that created this mess would be thankful for the bailout ? - if anyone believes that they are so gullible

September 25 2012 at 10:28 AM Report abuse +1 rate up rate down Reply
jep309

Duh! Use a credit union...NO charges. Have had my accounts with a credit union for 30 years.

September 25 2012 at 10:17 AM Report abuse +2 rate up rate down Reply