When tightening the belt around their finances, you probably look high and low for ways to trim excess expenses from your budget. Popular ways to cut expenses include all types of reductions like going out less, driving a smaller car, and even giving up cable television. People will eliminate all kinds of little luxuries in their quests to get their budget under control.
Examining how you use your discretionary dollars is definitely the best way to start making changes in your expenditures. Be sure, however, to take a close look at the expenses that you thought were fixed, as well. One source of expenses that tends to be overlooked during your budget review is the company that should be encouraging your financial success: your bank.
Here are some examples of fees that you might be paying unnecessarily:
Annual Fees on Credit Cards – With the availability of so many different credit cards, there is no reason to use a card that requires an annual fee from its customers. If you’re attached to a particular card that does have an annual fee, try calling customer service and explaining that you intend to switch to a card without an annual fee. In some cases the customer service representative can waive that fee for you.
Service Fees on Checking Accounts – Like annual fees, service charges on checking accounts should no longer be a problem for anyone, even the customer with a small account balance. Before you open an account, spend a little time exploring your options. Customers with large account balances have been enjoying free checking for a long time, but the advent of internet banking has allowed others to share this good fortune. Many banks offer free checking for their customers who utilize direct deposit and limit their use of teller services.
Maintenance Fees on Retirement Accounts – Don’t let the cost associated with retirement accounts keep you from opening your own IRA (individual retirement account) or Roth IRA. Internet banking has again come to the rescue to introduce fee-free retirement accounts to the general public. Banks like ING Direct allow customers to start their retirement funds without worrying that their balance will be consumed by fees.
ATM Fees – Save on bank fees by making sure that you’re using your bank’s ATM’s as much as possible. When you use another bank’s ATM, you open yourself up to paying the ATM’s service charge as well as a service charge from your bank.
Cash Advance Fees – These fees have always been incredibly high. If you need cash, get extra cash while you’re shopping with your debit card. Cash advances from credit cards should be avoided as much as possible.
You can’t avoid all bank fees, but with a little research, you may find that many of them can be avoided or at least reduced. Pay attention to the services that you use and look for banks that offer those services for little or no cost. Who knows? Maybe you’ll save so much in bank charges that you’ll be able to leave a few of those other little luxuries in your budget, after all.
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While you are on the phone with your credit card company to have the annual fee waived, I would recommend asking if they could lower the interest rate. If you are in good standing with them they may lower it for you. I am eligible every six months to request a lower rate. It depends if they are offering any special promotions.
Many banks will waive their monthly fees if you have direct deposit.
One additional item I’d add is to find out your bank’s policy on when debits and credits hit your account. My bank just changed their policy and hit me with $248 in overdrafts. I was able to get them reversed, but the bank said that many people had been zapped recently. They used to apply all credits, then all debits. Now they apply at the exact time the transaction occurred. Not only that, but they wait a full business day before crediting your account for ANYTHING. Needless to say, I’m changing banks, but when you’ve been with the same bank for 36 years, it isn’t easy. They have me by the throat!
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