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How to Avoid Most Annoying Bank Fees

CNN Money has a slideshow of the 9 most annoying bank fees [3] but fails to do a good job of explaining the best way to avoid them. Fortunately, we have simple solutions to many of these issues.

Forgetting to update your address

Apparently, some banks will charge you if they mail you a statement and it comes back undeliverable. This fee seems unfair and only exists so that you remember to update your address. The easiest way to avoid this fee is to go with paperless statements, so that you get an email instead of a letter. Going paperless can help the environment and, in some cases, more secure depending on what type of mail box you have. Ultimately, it’s still important to keep an updated address on file since the bank will need to send you tax documents.

Cashing in your coins

Many banks used to offer free coin counting services but nowadays a 5% fee isn’t unexpected. The easiest way to avoid this is to use your credit and debit cards more often so you don’t have to get coins in the first place. If you have a lot of coins, one option is to use Coinstar machines and trade it in for gift cards, such as at Amazon. It’s certainly not ideal, and you sacrifice any cashback you might get on purchases there, but it’s a fine alternative.

Talking to a human teller

This fee typically exists on accounts that pay lower fees for less service. The CNN Money example was of an e-banking account that charges you $8.95 a month if you want to access branches and talk to tellers. It’s quite easy to never use a teller at a bank as long as you have access to an ATM. Most of your transactions will be a simple deposit or withdrawal, neither of which need a teller. Or… don’t get an account that charges this fee.

Losing your debit card

Unfortunately, this is one fee that you can’t avoid unless you avoid losing your debit card. This one I can understand in part because producing another card does have a tangible cost, thought as is the case with all these fees, it’s certainly not on the level of the fee itself.

Getting a paper statement

You can kill two birds with one stone on this fee and the first one about forgetting your address – go paperless. Banks that charge you a dollar or two to receive a paper statement are not so subtlety hinting that you should go electronic. Going electronic is better anyway.

Requesting old statements

While this fee may seem annoying, it sounds fair to me. Banks that charge you for requesting a previous statement are just charging you for a service that they provide. Fortunately, you can easily avoid this by going online and looking for these statements yourself. If you’ve signed up for electronic statements, you can even start saving some of these statements yourself in a folder and not take up much space at all. Since it does take time for a bank employee to look up your records, I can understand charging for this.

Receiving money

I don’t receive wire transfers so I’m not entirely sure how annoying this fee is, though I suppose any fee gets annoying after a while. Apparently Chase and PNC both charge you $15 to receive a wire transfer, which you can avoid by avoiding wire transfers. 🙂 There are other ways to receive payment and some of them don’t cost anything except time (such as a check).

Redeeming rewards points

This fee only refers to redeeming reward points towards airline tickets and that fee is typically used to cover a federal excise tax associated with airline tickets. The easiest way to avoid this is by getting a reward credit card that gives you airline miles without charging you a fee. It’s annoying but 100% predictable and avoidable.

Closing your account

Seems unfair that banks would charge you a fee for closing your account, right? It turns out that they only do this if you close it within 180 days, or sooner, of opening it. These fees are typically used to counter folks who open accounts simply for the bank promotional deal that month. Since they are paying out a promotion and incur the cost of setting up an account, they want to make sure you stick around as long as possible.

As you can see, some of these fees are more annoying than others but ultimately many of them can be avoided. If you do get dinged for a fee, it never hurts to ask that they waive that fee [4]. They can only say no. 🙂

(Photo: colin_n [5])