Americans pay $29 billion in “junk fees” every year.
Why it matters: According to the Consumer Financial Protection Bureau, Americans pay at least $29 billion every year in what it describes as “excessive charges.” While resort fees are included in this figure, overdraft fees, overdraft protection fees, and fees to pay bills are all included.
Bank fees can be a nuisance for customers, especially when they add up and eat into their hard-earned money. This hits a small population especially hard, as 75% of overdraft fees are charged to consumers accumulating over 10 overdraft fees per year. Fortunately, there are ways to avoid paying unnecessary or unfair junk bank fees.
Review Your Bank Account Terms and Conditions
Before signing up for a bank account, it's essential to read the terms and conditions carefully. Understanding the fees associated with your account, such as monthly maintenance fees, overdraft fees, ATM fees, and other charges, can help you avoid unnecessary expenses. You can also compare the fees and features of different banks to find one that best fits your needs.
Or, of course, unbank yourself and never have to worry about fees again.
Use ATMs in Your Network
ATM fees can quickly add up, especially when you use out-of-network ATMs. Using ATMs in your bank’s network can help you avoid ATM fees, which can range from $2 to $5 per transaction. Some banks offer reimbursement for out-of-network ATM fees, but this may come with certain conditions or limitations.
Set Up Direct Deposit
Many banks offer fee waivers for customers who set up direct deposit. This means that your paycheck or other income sources are automatically deposited into your bank account, which can help you avoid monthly maintenance fees or other charges. Some banks also offer additional perks, such as higher interest rates or cash back rewards for customers who set up direct deposit.
Monitor Your Account Balance
Overdraft fees can be costly and can add up quickly, especially if you frequently overdraft your account. Monitoring your account balance regularly and setting up alerts for low balances can help you avoid overdraft fees. Some banks also offer overdraft protection, which can link your checking account to a savings account or credit card to cover any overdrafts.
Avoid Unnecessary Services
Some banks may offer additional services, such as identity theft protection, credit monitoring, or roadside assistance, that come with additional fees. If you don’t need these services, it’s best to opt-out and avoid paying the extra charges. As the fees are often obscured during the sign-up process, be extra vigilant to make sure you know what you’re paying for.