Avoiding Bank & Credit Card Fees

Did you know that after one late credit card payment the average family will pay an extra $1,129 per year in higher interest and fees? In this article I will go over some common bank and credit card fees and what to do to avoid them.

ATM Usage Fees:
If you ever use another Banks ATM you are paying an average on $1.54 + another $1.37 that is charges by your bank for using another bank’s ATM. You can avoid these ATM Fees by using your own bank instead or getting cash back with your debit card at the grocery store or some convenience stores. Another option is to setup an internet-only bank account because many don’t charge for out-of-network ATM usage.

Bank Service and Maintenance Fees:
You can be charged these extra bank fees for a number of reasons including falling below your minimum balance allowed, writing to many checks in a month (sometimes even making to many counter deposits), or at some banks for simply opening up an account with them. The average fee for dropping below your minimum payment is $10.81. You can usually avoid these fees by asking if your bank offers a free checking account option (most do), or a checking account with less restrictions like your minimum balance required or number of checks you can write. Using direct deposit with your employer can also sometimes help you avoid fees.

Credit Card Late Fees:
Even if your credit card company receives your payment just one day past the due date you will be charged a large late fee averaging $29.95. You can sometimes avoid this fee if you are late for the first time. Call their customer service and explain how great a customer you are and you may be surprised that they waive your fee. It always helps if the person on the other line likes you so be nice but persistant. If it does not work, ask for the manager or supervisor and give it one more shot.

Increased Credit Card Rate:
If you are late with your credit card payment the company is likely to boost your interest rate substantially. If you get them to waive your first late fee, be sure to also ask that they drop your interest rate back.

I rarely (almost never) send in a payment late but it actually happened a few days ago. One of my credit card statements never arrived and I was so busy I didnt think about it. The next months statement did arrive and there was a late fee charge, a huge jump in my interest rate and a large finance charge (because of the increased interest rate). I called and explained that I did not receive the prior months bill and that I have never had any other late payment. She quickly said she would waive the late fee. She did NOT volunteer to drop the interest rate back down to what it was (in addition to the extra finance charges) but I asked and everything was taken care of. Point being if you are late with a payment make sure they not only refund the late charge but also drop you interested rate back to what it was if applicable.

If you rate is increased with no good cause call and tell them you are holding a better offer you received in the mail. They want to keep your business. If that still does not work then transfer your money to a lower interest rate credit card (but don’t hop around to much because opening up to many credit cards in a short amount of time is not good for your credit rating).

Wishing you success and avoidance of those fees,
Tim Schroeder

Sources: Center for Responsible Lending, Bankrate, Consumer Action, and Money Research