Banking fees continue to pop up and surprise consumers, partly because sometimes, information about them is so hard to find. A Consumer Federation of America report released in June found that some banks charge high fees for even relatively brief periods of account inactivity as well as high fees for just three (or fewer) withdrawals from savings accounts. CFA says such fees amount to "anti-consumer" practices and notes that many people don't know about them until they get hit with them.
Meanwhile, a survey released earlier this year from MoneyRates.com found that on average, bank fees, including monthly maintenance fees, overdraft fees and ATM fees, continue to go up. The average monthly maintenance fee on checking accounts, for example, rose by 18 cents during the second half of 2012 to $12.26 a month, or almost $150 a year. (The survey also found that just over one-third of checking accounts don't have monthly maintenance fees.)
"Fees continue to march higher," says Greg McBride, senior financial analyst for Bankrate.com. "It's more important than ever for consumers to really be on their toes and make sure they're not triggering fees," he adds. Common reasons for fees include failing to maintain a minimum balance, exceeding the maximum number of monthly withdrawals from savings accounts and allowing an account to fall dormant. Banks are also expected to roll out more fees related to their mobile apps in the coming months.
[See: 10 Dangers of Mobile Banking.]
"[Bank fees] are a huge problem, and it's not confined to low- and moderate-income individuals, although it's more pronounced there. Cash flow might be tighter, they might have higher debt levels overall and less ability to keep cash on hand and maintain balances," says Lynnette Khalfani-Cox, personal finance expert and chief executive of TheMoneyCoach.net.
Avoiding those unpleasant surprises depends partly on closely monitoring your finances in order to keep balances above any minimum requirements and to avoid overdrawing the account. Money experts also advocate reading all of the fine print associated with the account, including any documents that are posted online. Here are seven more tips for avoiding bank fees:
Watch those disclosures. "Anytime you get a new fee disclosure, that's an indication that something has changed," McBride warns. He suggests opening all mail from your bank and reading it carefully so you don't get surprised by a deposit item return fee, for example, when you get stuck with a fee after a check you deposit doesn't clear, or a $5 fee for failing to inform your bank that your address has changed.
Wade through fine print. "Overall, banks and credit unions do a pretty good job of disclosing information about savings accounts. However, a minority of banks make it very difficult to learn about all of the fees and other important terms and conditions. In some cases, I had to look very hard on the website and go to different places until I found a legal document that I had to read through," says Stephen Brobeck, executive director of the CFA and author of the June report on overdraft fees. Even though it's a pain, and Brobeck says banks should make information about fees more easily accessible, he suggests taking the time to wade through those documents to make sure you don't miss any fee details.
Ask a real person. An even better alternative to dragging through all that material is to talk with a real person at the bank, Brobeck says. "Ask them that one question: 'Are there any fees?' That's almost what people have to do, since most people are not going to read all of the fine print," he says. If there are fees that will be difficult to avoid based on your banking habits, then Brobeck suggests looking for a different bank account.
Watch your apps. Banks are still in the early stages of figuring out how (and whether) they will charge consumers for using mobile apps, McBride says. Consumers currently expect to use them for no charge, which could prove problematic if banks start to roll out additional fees for mobile usage.
Mix and match accounts. You might be able to find a free checking account at one bank and a high-interest savings account at another institution, McBride says. "There's a good argument for maximizing your benefit on each account, even though people value the convenience of having everything under one roof. There's a price to be paid for that," he adds.
Check out online banks. Khalfani-Cox says many online banks don't have monthly maintenance fees, and they typically have lower fees in general. She also recommends consolidating multiple checking or savings accounts into one account in order to more easily meet the minimum balance requirement. Having paychecks and any public benefits (like unemployment checks) automatically deposited can also help avoid going under the minimum balance requirement.
Don't be afraid to switch. If you're not happy with the fees you're paying, then Khalfani-Cox says it's time to shop around for a new bank – or a new credit union. Credit unions typically have lower fees and pay higher interest rates on savings accounts. And that's exactly what many consumers are looking for.