How to Make Banks Work for You

   

One of the most lucrative industries in the United States is the financial industry. Banks generate billions of revenue each year in fees due to misunderstood or overlooked fine print, frequent changes in fees and services and a banking system that is designed to cater to the wealthy.

Banks charge several fees such as late fees, maintenance, monthly, overdraft, out-of-network ATM, statement, minimum balance requirement and minimum opening balance requirement fees. During the first three quarters of 2016, 626 large banks earned $8.4 billion from non-sufficient funds and overdraft fees. In 2015, financial institutions and banks earned $11.7 billion in credit card late fees. Customers are basically working for banks by helping them generate revenue from fees.

According to the most recent MoneyRates.com Bank Fees survey, the average checking account monthly maintenance fee is $13.25. Large banks assess higher fees for checking accounts than smaller banks. The average checking account monthly maintenance fee at large banks is $14.93, $11.06 at medium-sized banks and $11.09 at small banks. These charges can add up quickly and take a huge chunk out of your checking account.

The main goal of conducting business with a bank is to ensure that the bank is serving the customer’s needs versus having to worry if the bank will charge a fee for doing something or not doing something. Banks are in business to make money and continuously look for ways to increase their profit. However customers still have several options to make banks work for them and put extra money in their pocket.

ABA’s senior vice president and deputy chief counsel for consumer protection and payments, Nessa Feddis, states, “Today’s consumers have become adept at using the many options that may allow them to bank for free, whether it’s maintaining a minimum balance, opting for direct deposit or using ATMs owned by their bank. The financial services marketplace remains highly competitive and consumers hold all the cards.”

These practical ways will show you how to make banks works for you that will save you money on fees and increase your account balance.

Use Free Accounts

Look for banks that offer free checking and savings accounts. Comparison shop with websites such as www.mybanktracker.com to find the best options that meet your banking needs.

Use Direct Deposit

Use direct deposit to become eligible for free checking accounts. You may also be eligible for a higher checking or savings account interest rate or a lower interest rate on a loan.

Maintain Minimum Balance

If an account has a minimum balance requirement ensure that you meet it every month to avoid overdraft and monthly fees. Be sure to read your monthly bank statements for notifications about account changes.

Stay In Network

Avoid ATM fees by using ATMs within your bank’s network. You can also utilize the cash-back option at grocery stores and post offices to get cash.

Track Spending

Track spending daily or weekly to ensure you have enough funds to cover your transactions and to avoid overdraft fees. In addition, consider using online banking or mobile banking to help track spending.

Set Reminders

Ask your bank to setup email or text alerts or reminders when your account balance falls below a certain amount to avoid overdraft fees.

Use Bank Features

Take advantage of bank features such as rewards goals, rewards cards or automated savings programs available at banks such as Chase, US Bank, USAA, Bank of America or Wells Fargo to help you reach your saving goal faster.

Use Interest

Take advantage of compound interest by opening an interest-earning checking or savings account, investment account, CD or money market. Don’t access the funds for at least six months. Comparison shop and search for banks with higher interest rates or consider opening an online account.

Use Bank Perks

Use bank perks such as gift cards, referral fees and teaser rates. Deposit the extra money into your saving accounts or use it to pay down debt. Read the fine print for banks that offer a sign up bonus to open a new account. Some banks require you to keep the account open for up to twelve months.

Avoid Late Fees

Automate your bill payments to avoid late fees.  Avoid late fees on credit cards by paying the balance in full each month or as soon as the bill arrives.

Reduce Debit Card Fees

Consider using the credit option when making debit purchases. If you have a rewards card some banks only rewards customers when they sign for purchases. Deposit money received from cash back rewards into your account or use it to pay down debt.

Eliminate Overdraft Fees

Verify if you are enrolled in an overdraft program. Opting out of an overdraft program will waive overdraft fees. In addition, find out the order that your bank processes your transactions. Some banks process the last transaction first which could result in an overdraft fee.

Credit

Take advantage of free credit monitoring services or free copies of your credit report or credit score.