AMERICANS are shelling out extra cash each month thanks to six sneaky fees added by banking giants such as Chase, Bank of America, and Wells Fargo.
These hidden bank fees may be costing you hundreds of dollars, with the money you owe accumulating rapidly from a combination of monthly charges, overdrafts, and other less obvious costs.
Banks frequently charge fees to bump up their revenue, which can be a nuisance for customers[/caption]
Americans paid roughly $415 billion in interest and fees related to financial products in 2023[/caption]
If you’re a banking customer with a checking or savings account, it’s more likely than not that you have been hit with a fee at one point or another.
Banks often charge fees to pull in additional revenue and help cover the costs of providing financial services, such as operational expenses like worker salaries, security, transaction processing, and regulatory compliance.
While the fees earn banks more money, they are merely a nuisance for customers.
Americans coughed up around $415 billion in interest and fees related to financial products such as bank accounts in 2023, per the Financial Health Network’s FinHealth Spend Report.
Read on to learn more about six common bank fees and how to avoid them stacking up.
1. ACCOUNT CLOSING FEES
When banking customers open a new checking or savings account, they generally must make a minimum deposit upfront, which can be as little as $1.
Beyond the minimum deposit, banks often don’t ask for any fees or extra charges to make a new account.
Customers who opt to close their new account, however, may be forced to shell out some cash, as some banks charge a fee for closing a checking or savings account too soon after it is first opened.
Account holders often incur this fee if they shut down their new account in the first 90 to 180 days, with early account closure fees generally costing from $5 to $50.
2. PAPER STATEMENT FEES
Many banks now charge customers who opt for paper statements, with fees up to $5 per month, in a bid to encourage customers to use their online services instead.
This means that receiving an envelope in your mailbox each month with your account details can not only be costly, but also harm the environment and require you to keep up with all your paperwork.
Selecting paperless electronic statements instead when opening a checking or savings account helps to reduce your monthly clutter and costs.
3. ACCOUNT MAINTENANCE FEES
An account maintenance fee, or monthly service fee, is the charge that banks frequently tack on to keep your account open.
The average maintenance fee on interest-bearing checking accounts is $15.45, while the average for accounts that don’t accrue interest is $5.47, per Bankrate’s 2024 Checking and ATM Survey.
How to contact your bank
WITH bank scams running rampant, it is important to know how to reach out to your bank without risking fraud.
There is of course the foolproof method of going to your bank in person, but you are likely going to be directed to a customer care phone line.
In order to ensure that you are contacting the bank, make sure to use a phone number given to you by the representative or off of the bank’s website.
Some banks also have online helplines that can securely connect you with a representative.
Conversely, if you think the bank is reaching out to you with an account issue – make sure to verify the concern by calling a bank contact that you know is legitimate.
Scammers commonly mascarade as bank representatives to steal information from frightened customers.
Banks will generally waive this fee if you keep your balance above a certain amount, have a direct deposit set up, or make a specific number of transactions with your debit card.
A handful of financial institutions offer no-fee checking accounts, such as Capital One, Ally Bank, Discover, Alliant, Chase, Bank of America, and more.
4. OVERDRAFT FEES
Banking customers incur overdraft fees when they spend more money than they have in their account, causing their balance to go below zero.
Banks charge these fees when they cover the difference on transactions that would otherwise overdraw your account, essentially giving customers a short-term loan instead of declining the transaction.
The average overdraft fee is $27.08, according to Bankrate’s 2024 checking and ATM fee survey, with customers often charged these fees per transaction.
An easy way to avoid this is to set up account alerts so you are notified if your checking account balance falls under a certain amount, such as $50 or $100.
Opting for a bank without overdraft fees, such as Ally, Capital One, or Citibank, will also save you some cash.
5. ATM FEES
Consumers are often charged out-of-network fees for withdrawing cash from a machine that is not part of their institution’s network.
This results in two separate charges, including a surcharge from the customer’s bank and a fee from the bank that owns the ATM.
The average total cost of using an out-of-network ATM has now reached a record high of $4.86, per a recent Bankrate survey – a nearly 2% increase from $4.77 last year and a record high for the third year in a row.
How to avoid bank fees
Consumers can withdraw money without being hit with surcharges in the following ways:
- Use a bank with a large ATM network – find a bank that provides free access to plenty of ATMs near your home or work, such as:
- Capital One: 70,000+ ATMs from Capital One and the MoneyPass and Allpoint networks
- Citibank: Over 60,000 ATMs from Citibank and the MoneyPass network
- Discover Bank: 60,000+ ATMs in the MoneyPass and Allpoint networks
- PNC Bank: More than 60,000 ATMs from PNC Bank and the MoneyPass and Allpoint networks
- Bank of America: 15,000 ATMs
- Chase Bank: 15,000 ATMs
- Get cash back from debit card purchases – receive cash back when you check out at participating retailers and use your debit card.
- Find a bank that reimburses ATM surcharges – some banks will reimburse ATM fees imposed by other banks when you use their ATMs.
Source: Bankrate
6. DORMANCY FEES
Customers may be hit with inactivity fees, or dormancy fees, if there has been no activity on their account for a specific period of time, ranging from a few months up to a year.
Banks are required to turn the cash over to the state, then known as unclaimed property.
These inactivity charges are intended to prevent this from happening by incentivizing users to remain active on their accounts.
While not all banks charge these fees, those that do usually charge between $5 and $25.
The best way to avoid these charges is to either set up automatic transfers or bill payment or avoid opening more accounts than you can keep up with.
Check out Wells Fargo’s new monthly $15 fee on “everyday checking” accounts starting November 29.
Plus, read up on the truth behind a new “exploitative” overdraft law at Bank of America, Chase, and more – and how it will affect your account.
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