10 Ways To Avoid Bank Fees
Bank fees are depressing. No one likes them. No one wants to pay them. It's like paying money and getting nothing in return, money you could be spending on more important things, or even money you could be saving. So here are 10 tips to avoid paying these silly bank fees.
Know Your Balance
You should always know how much money is in your bank account, this way you can avoid fees for overdrawing your account. It also helps to know how much you have so you don't leave yourself short at the end of the month. It's so easy to check now, via mobile phone apps, online banking, or simply printing a statement from your ATM. (Make sure it's your bank's ATM though otherwise you may get charged fees!)
Overdraft vs. Credit Card vs. Other Options
Overdrafts on bank accounts can have some hefty fees attached to them. Would using your credit card be a better option, especially if you have an interest free period? If you're not going to be able to pay back the full balanace of the credit card when it falls due, then you'll be facing mounting interest payments. So it would be worthwhile to brainstorm some other ways of getting the money to avoid overdraft and credit card interest.
Don't Use Cheques
By handing someone a cheque, you leave the decision up to them as to when they will cash it. Which means you won't know when this money will come out of your account. It could come out when you have forgotten about it, leaving you with not enough money to cover your expenses that week. Try to pay by way of automatic direct debits, or bank transfers, these services will show that the money is gone from your account straight away, so you'll know exactly where you stand.
Make Up A Budget
To make sure you avoid being forced to overdraw your account, try to plan out a budget at least a month ahead. If you have time, you could even do a yearly budget, this is a great way to find where you are spending heaps of cash that you don't need to, and thus can cut some unnecessary expenses.
Calendar Direct Debit Dates
Direct debits sometimes have that habit of sneaking up on you when you have totally forgot that they were due. Go through all your bills, loans, and whatever else uses direct debits and mark them on your calendar, that way you will know when they will come out and how much you have to leave available for these payments.
Pay Off Debts
If you have money sitting in a savings account, but are paying interest on a credit card balance or a loan, then it may be worth using your savings to pay off debt. The interest paid on your savings is usually less than the interest you will be paying on the loan or credit card you have. Instead, you might want to consider using your savings money to pay off the debt. It may be hard to see that cash you've been saving go out the door, but paying debt off as soon as you can saves you on interest payments and fees.
Increase Your Overdraft Limit
If you already have an overdraft, then see if you can get the overdraft limit increased if you are struggling. Speak to your bank and see what they can do. Also consider speaking to those companies where you have bills owing and let them know you are in some financial hardship. They likely have a hardship policy that may be able to help you.
Use Cash, Not Card
The oldest trick in the book, simply withdraw the amount of cash you want to spend that day or week, and stick to it, leaving your card at home. For most people it is a lot harder to spend money when you are seeing it dwindle down physically, especially compared to using your magic money card that never shrinks no matter how much you spend! If you don't like carrying cash around, you can still achieve the same outcome via the use of technology.
If you have two accounts set up, say a savings and a transaction account, simply take all the money out of your transaction account and deposit it into your savings account, except for the amount you want to spend that week. The only account that should be linked to your card should be the transaction account, not the savings account. It works the same way as if you had cash, just make sure you remember to keep checking the balance so you don't get stuck with no funds. And also remember to make sure you put any money in the account that will need to be in there for direct debits to come out.
Ask The Bank To Wipe The Charge
If you are a good customer of the bank, then the bank won't want to lose you. If you get a charge that you don't like, simply ring them up and tell them you are not happy, and see if they can cancel it for you. If you want to be real tough, threaten to leave and use another bank. Be careful not to do it too often though, only use this if you get the rare bank fee every now and then.
If your bank charges too many fees, consider switching to a bank that doesn't charge so many fees. Competition is fierce and there are many different banks in the market offering a variety of accounts, so you should be able to find one better suited to your needs if your current one is giving you grief. If you'd like to view some of the options in the market you can compare bank accounts on MoneyBuddy.