The major media outlets have been warning consumers that banking fees are on the rise. What used to be offered as "free" will now be associated with a fee, leaving consumers to scratch their heads and wonder why. New government rules have stifled the bank's ability to collect fees on products such as overdraft protection. In the past customers were automatically afforded overdraft protection when their account was overdrawn. Instead of the check bouncing, the customer would pay $25 or $35 and it would clear, avoiding additional charges and embarrassment.
New regulations demand that the consumer must now opt in for this service. Banks report that a reduced number of customers are using the service, which has had a profoundly negative impact on fee income. Avoid paying fees by scrutinizing accounts more closely and taking a new approach to how you do business with your financial institution:
1. Request a Fee Schedule
By law, financial institutions must disclose fees to the public. Even if you already have established accounts with your financial institution, request an updated copy of the fee schedule and discuss how new fees will impact your relationship.
Ask the customer service representative to examine your total relationship and identify all areas where fees are applied. If you discover that your current relationship is overrun with fees, ask for a relationship analysis to find ways to avoid fees. Often by simply doing more business online or by adding a free service, such as online bill pay or e-statements, customers can knock off a few fees.
2. Revise Your Bank Relationship
Many banks still build in ways to avoid fees by either relationship banking or electronic service accounts. If your free checking account is no longer free, ask about the bank's online or e-checking product. Almost all financial institutions offer a bare bones online checking account, but often are free because the customer conducts all business online, ultimately reducing the bank's costs.
Also, customers who have a deep relationship with their bank should consider a relationship pricing account. Relationship pricing is when the bank considers the customer's entire relationship (including loans and investment products) and provides rewards or incentives to the customer.
3. Read Everything from Your Bank
All disclosures and correspondence from your bank must be read and understood in order to effectively reduce the number of fees you pay. Your statement should be scrutinized every month to ensure extra fees aren't added into your account. Also, before you open a new account, read the fine print disclosure. If you don't understand the verbiage, ask a bank representative to explain it to you.
4. Dip into Your Loyalty
Have you been a loyal customer but was hit with an overdraft fee? Ask to have it waived. It's in your bank's best interest to keep loyal customers happy will possibly waive an occasional fee. Also, request to have the annual fee removed from your Visa if you've been a customer who has paid on time.
Each bank operates differently, so meet with your banker to identify fees you can avoid and what you can do to have them waived.
Gina Ragusa is a freelance writer and mom from sunny (and sometimes not) South Florida. Her 15 year experience ranges from writing about banking to tattoo parlors. Read more about her adventures at http://blog.wahm.com/