There are certain financial habits that can increase your bank fees and get you stuck. These are some of those habits.
If you’re not careful, everyday tendencies can trigger bank fees that drain your cash. It is important to know those financial habits that can raise your banking fees. Increase in banking fees generally are caused by missteps we often make. In fact, the most common bank fees are surprisingly easy to avoid.
This is why experts can identify financial patterns that can lead to increased bank fees. Read on to learn what you can do to reverse those habits and avoid hefty charges.
According to www.bankrate.com, there are seven financial habits that can raise your banking fees. These are:
1. Withdrawing more money from your account than you have
Withdrawing more money from your account than you have can trigger costly fees, which have grown in recent years. In fact, overdraft fees, also known as nonsufficient funds fees, have gone up over the years.
2. Dropping below your minimum balance
Some banks require you to maintain at least a certain amount of money in your account. If you dip below that number, you can be penalised for it. Say your bank requires you to maintain an average balance of at least N10,000 in your account. If the average amount you have in the account drops below N10,000, you can be charged a fee that is taken directly from your account.
To keep your balance up, have your paycheque directly deposited into your current account. Then consider using your bank’s online tools or a phone app to monitor your balance. If possible, add a cushion of N5,000 to N10,000 in your account for unexpected expenses, according to experts. Also, reconcile your current account each month to stay on top of your balance and spot any errors.
When looking over your bank account, if you realise you’re not able to regularly maintain the needed balance, it may be time for a change. Consider opening an account with a lower minimum balance requirement or no minimum balance needed at all. Some commercial banks offer this type of account.
3. Rushing to open an account
“Customers often rush in to open an account,” says Christy McCoy, senior vice president and chief financial officer for Lone Star Capital Bank, a community bank based in San Antonio, United States.
Before opening an account, review its features to make sure it truly fits your needs. If you want to open a current account that earns interest, check that you are able to meet the requirements, such as maintaining a minimum balance, to avoid charges. For a savings account, ask how many times you can make a withdrawal during the month without having to pay a fee.
4. Taking money out of the wrong ATM
Taking out cash from an ATM that isn’t associated with your bank can be costly. The average surcharge that banks charge non-customers who use their ATMs is N65 after the first three withdrawals in a month. If you’re travelling, or are not sure where your bank’s closest ATM is, check the bank’s website or use a phone app to locate one nearby. ATM fees are the same whether you withdraw N10,000 or N5,000 or N20,000 and you may be able to avoid additional fees for taking out more cash in the near future.
5. Holding too many bank accounts
It may seem easy to keep funds separate by having them in different accounts. However, juggling too many accounts can get expensive. If you have several accounts and carry a low balance in each of them, you can face a monthly fee for every account.
You may be comfortable with a bank, especially if you’ve been there a number of years. However, it may be time to make a switch if you’re paying for something you can get for free somewhere else.
Perhaps you’ve had a current account at a bank close to your home for the past decade. When you opened the account, there was no monthly fee. However, in the past year, the bank added a regular fee for the same type of account.
6. Skipping reading through bank notices
If you regularly delete or throw away notices from your bank without looking at them, you can miss important information. “Financial institutions are required to disclose updates to their fees,” says Blake Lyons, vice president of marketing and business development at Randolph-Brooks Federal Credit Union based in Live Oak, Texas.
Once you’re aware of an upcoming change, you can take measures to avoid the fee. For example, you learn of an increase in foreign transaction fees at your bank. The next time you travel abroad, you may consider paying in cash or using a credit card that charges lower fees.
7. Forgetting to alert your bank of a move
If you move to a different home and don’t tell your bank, you can pay for it. To keep expenses down, make a list of organisations to notify when you change address. Include your bank on the list, and make it one of the first places you contact to update your residence information when you move.
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