People always pay fees for all kinds of things. It is no big deal, really, and it is such a part of everyone’s life and routine. Fees are something that people accept as a general part of life, if you want to have something – either product or service – you need to pay a fee for it.
Fees are relatively acceptable, because just like many things in life, they are inescapable and inevitable. People have already found them to be quite acceptable. But even so, that does not mean people are happy and willing to pay every fee that they come up against. With all the types of fees that need to be paid, there are bound to be those that are considered to be too annoying. This doesn’t mean that there aren’t those that people are not going to pay willingly, but the annoying ones definitely stand out in everyone’s minds.
For anyone looking for solid examples of such fees, bank fees come to mind very easily. So that people could be able to handle it better – and before they do so – they need to have a basic understanding of it first.
As should be expected, the term bank fee does not simply cover one area or aspect of charges that banks have for their services. It is almost all encompassing term that describes the nominal fees that are meant for different bank services. It could be a fee for making simple requests such as for a deposit slip and other, more complicated transactions.
An important fact about bank fees is that it makes up a considerable part of the bank’s revenues. This is especially true for local and regional bank branches. One important characteristic of bank fees is that it is not deductible. The exception would be for IRA accounts – banks charge for annual custodial fees.
Bank fees seem to be regular fixtures of banks and the processes within it. But do the bank’s customers actually know the kind of bank fees that they are asked to pay? That’s important because people need to have an understanding about things that they are charged with. Bank customers need to realize that they are also charged for things or transactions that they might have otherwise believed to be free. Examples are bank fees that are for paper statements and for transactions that are done outside the country.
It has been said that the reason why banks actually have those bank fees, is that additional services are being provided to them, necessitating the added fees. Since those added services are sure to cost money, hence the additional fees. The more services there, the more bank fees would be charged. People would undoubtedly want to avoid any additional bank fees, regardless of the reason for its existence. Because there are many different types of bank fees, there are those that can be considered as minimal, and therefore should be avoided as much as possible.
The following are some of the ways on how it could be avoided :
Fee for Early Account Closure
It is a common practice for banks to have as a requirement for their customers to have their accounts open for a specific period of time before they could close it. Not doing so would mean having to pay a fee. It is a way of discouraging people to close their accounts immediately. Examples of this are the following – HSBC and US Bank charge $25 to their customers who close their accounts within 180 days. On the other hand, Citibank charges a similar fee of $25 for accounts that are closed before 90 days have been reached.
Banks are obviously just trying to look after themselves, since it costs money to open and close an account, and they would like to recover their expenditures through the fees. In order to avoid the bank’s early closure fee, a customer simply needs to make sure that the account is open beyond what is considered the bank’s minimum period.
Minimum Balance Fee
The minimum balance fee is another annoying bank free that can be avoided. For some customers, this can be really annoying because who would want to be charged with a fee when their bank account balance is already quite low? But it is a reality; there are banks that charge because some customers cannot meet a minimum amount.
Since the banking situation calls for low interest rates, a thing such as a minimum balance fee exists. With the banks earning less than adequate money from the accounts due to low interest rates – particularly those that have low balances – the fees are there. A bank actually has to spend about $300 annually for something like checking account services, which further explains and even justifies the minimum balance fee.
Foreign Transaction Fees
Then there is also something that is known as foreign transaction fee. This is charged when the bank customer happens to purchase something from a foreign country with the use of a US credit card. The bank would then charge the customer with what’s called a conversion fee. This type of bank fee is done so that the customer can be protected by the bank, what with the increased chance for fraud that’s present in foreign transactions. In order to avoid this, simply use cards that do not have this kind of foreign transaction charge – examples are the Venture and Platinum Prestige cards from Capital One and the Sapphire Preferred card from Chase.
Paper Statement Fee
The paper statement fee from banks could also be a little annoying. Since online banking is now available, more and more people have gone for it and those who do not want to find themselves being burdened with unnecessary fees like the paper statement fee. It is really more of a practical concern than anything, since postage costs continue to rise and a paper statement is going to cost banks around $1 to send to their customers. The more often they do that, the more money it costs. And that in turn demands customers to go for online banking more.
Maintenance Fee (annual or monthly)
The maintenance fee that is regularly charged by many banks (it could be annual or monthly) is one of the most common of bank fees. There are banks that charge a maintenance fee of about $12 per month for a regular checking account. The fee has the option of being waived though, if the customer is able to meet certain requirements from the bank. For a customer to avoid this kind of fee, he needs to look at the policy of the bank and see if it could actually be avoided directly or if he has to fulfil certain requirements.
Returned Mail Fee
If the mail sent out to you by your bank gets sent back to them for any reason, a fee is usually charged which is known as the returned mail fee. The banks usually have “return service requested” printed on their envelopes, so that it gets sent back to them whenever it can’t get delivered to their customers. In order to avoid having to pay this fee – which could easily increase – you should update your new address whenever you move.
These are some tips on how to avoid common bank fees.