Budgeting for food and gasoline is probably second nature to you, but have you included bank fees in your budget? The fees banks charge for the many services they provide can easily slip our minds sabotaging our budgets in the process. If missing money each month leaves you wondering where it went, take a careful look at bank fees and charges.
Types of Fees
Your chequing account, debit and credit cards, and your mortgage are some of the products subject to fees and charges determined by your bank. Some fees are related to the services you use while others may be related to your spending or payment habits.
Chequing accounts have a monthly service charge often determined by how much money you keep in your account and how many bank services you use. Usually, the higher your balance the fewer fees you will be charged. Student and high balance accounts are often free of a monthly service charge.
The services you use may also add to your costs. Using an online bill payment service or requesting statement or cheque copies may cost you money. Talking to a teller instead of using an online service may also trigger a charge.
Fees and charges add up quickly with expensive missteps like using your debit card at the wrong ABM or letting chequing account balances slip below set levels. Having trouble balancing your account this month? A phone call to customer service may cost you.
Credit cards and loans issued by your bank are also subject to fees. If you own a credit card, you may have to pay an annual fee. Forgetting to make a payment or exceeding your credit card limit can also be very expensive. Even if you don’t use your card, you may still be charged an inactivity fee.
Saving on Fees
There are lots of ways to save money on service fees and charges. One of the easiest ways is to switch banks. A survey conducted by Ernst and Young LLP found that only 14% of Canadians had changed their bank in the last five years. Most people don’t want to deal with the perceived hassle of switching banks. However, the technology used by banks actually makes it very easy to switch banks. Compare fee schedules, and switch if you can save money.
If you love your bank and can’t stand the thought of leaving, talk with your banker. Loyal customers are often rewarded with free chequing accounts and a host of other fee-free services. Don’t forget to mention your credit card or loan fees. Your bank really wants to keep you as a customer.
Refinancing a high-fee, high-interest mortgage or loan is also an excellent cost-cutting move. The same goes for your bank-issued credit card. Shop for the best possible interest rate and the lowest fees in town.
It’s easy to see that banking fees and charges can quickly add up. Be sure to examine your statements and look for ways to cut or eliminate charges. Your reward will be more money in your pocket.