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Hidden Bank Fees

Beware of these costly charges

WILLIAM J. LYNOTT

Banks are in business to make money, and today’s tough economy, along with falling profits, is causing them to look for ways to take a bigger bite than ever out of your pocket.

Here are some of the most common bank fees that may sneak up on you.

Overdraft fees

If you bounce a check or overdraft your account, you’ll likely get hit with an oppressive fee (as much as $35 per transaction), one of banks’ most profitable ploys. According to a report from the Consumer Financial Protection Bureau, overdraft penalties now represent more than half of banks’ fees from consumer checking accounts.

Keep in mind that your bank is not required to notify you when a check bounces. In fact, some banks set no limit on the number of overdraft charges in a single day.

ATM service charges

These days, almost anywhere you go, there’s an ATM. But, there are hidden costs to these machines that aren’t affiliated with your bank.

The average ATM service charge — the fee charged by the machine’s owner to a non-customer — has risen to record highs. What’s more, when your bank finds out you’ve made a withdrawal from an ATM it doesn’t own, it can charge you a “foreign” ATM surcharge, and you’ll only learn about that fee when you look at your bank statement.

Disappearing free checking accounts

According to a recent survey by research firm Moeb Services, the majority (59%) of banks currently offer free checking accounts. Banks lose money on checking accounts, so many are now offering free accounts only to their best customers.

According to Bankrate.com, seek a checking account that does not have a monthly service charge, minimum balance requirement or limit on transactions.

Dealing with a live person

Some banks are trying to charge customers who prefer dealing with a live person vs. using an ATM. Often called “excessive” use of tellers, these fees are imposed on customers who deal with tellers more than a set limit, often more than two times per month. Keep a sharp eye on your monthly statement for this one.

Closing accounts

Don’t open a new bank account that you expect to keep for a short time. Many banks are now charging for closing an account that’s been open for a short time (less than six months).

Beware of fees

Not all these fees are carved in stone. If you find one on your next statement, don’t hesitate to ask that it be removed. Though they won’t advertise the fact, most banks will oblige, especially if you are a “good” customer. OM

Information in this article is provided for educational and reference purposes only. It is not intended to provide specific advice or individual recommendations. Consult an accountant or tax advisor for advice regarding your particular situation.

MR. LYNOTT IS A FREELANCE WRITER WHO SPECIALIZES IN BUSINESS MANAGEMENT AND PERSONAL AND BUSINESS FINANCE. VISIT WWW.BLYNOTT.COM, OR TO COMMENT ON THIS ARTICLE, VISIT TINYURL.COM/OMCOMMENT.