ATMs

Have you noticed that lately new bank fees and fee increases have been popping up like pimples on prom night? Much of this is because of new federal regulations limiting revenue major financial institutions take in from things like overdraft fees and, more importantly, debit card swipe fees. Also known as interchange fees — this is what banks charge stores and other merchants every time you swipe your debit card. To make a long story short, those new rules mean banks will be losing billions of dollars. Unfortunately, they’re turning to consumers like you to make up many of the losses.

The most talked about new fee came from one of the biggest financial institutions in the country, Bank of America. Not long ago, Bank of America said it would start charging customers $5 a month if they use their debit cards. That plan was recently scrapped — but that doesn’t mean banks won’t be looking for other ways to make a profit. If you’re not careful, bank fees can start piling up. But when you pay attention and make smart choices, you can actually avoid many of these fees. Here are the four easy ways to do so.

Make Your Opinion Known

As you might expect, Bank of America’s plan to start charging people $5 a month caused a huge uproar of complaints and criticism. People wanted to know why on Earth they should have to pay to access their own money.

The truth is that debit cards actually save banks a lot of money when compared to the cost of processing paper checks. However, the fees connected to debit cards, as well as overdraft charges were subsidizing popular free checking accounts. That’s why you see so many banks getting rid of free checking.

Bank of America’s debit card fee was the last straw for many people. The decision could have paved the way for other financial institutions to start charging similar debit card fees. In fact, major banks like JP Morgan Chase and Wells Fargo were already testing fees of their own.

But the outrage of consumers around the country prompted many, including Bank of America, to change course. JP Morgan Chase and Wells Fargo decided to end testing and won’t expand the debit card fee program. SunTrust bank in Atlanta and Regions Bank in Alabama also chose to eliminate debit card fees.

At first, Bank of America stood its ground. CEO Brian Moynihan even defended the fee saying banks had the right to make money. Then the company looked to compromise, and planned to give customers more ways to avoid the unpopular fee. But in the end, even BofA decided to axe their $5 debit card fee.

Make no mistake about it. When consumers make a stand, companies take notice. So don’t assume no one is listening when you send emails, voice your opinion on social media outlets or take other actions to express your thoughts and concerns.

Switch Financial Institutions

Probably the best way to avoid new bank fees is to find a better bank. Many experts suggest you look into smaller community banks and local credit unions. There are quite a few benefits that come with making such a switch.

Credit unions typically have fewer fees, or the fees they do charge for things like bounced checks or low balances are often less than major banks. You’ll be more likely to find free checking accounts at smaller financial institutions. Credit cards issued by a credit union may also come with lower interest rates, while interest you gain on savings accounts and certificates of deposits are often higher.

If you’re a customer of a credit union, you’re also one of the owners. That means you get to vote for members of the board and on other issues related to the company. At big banks, their primary focus is making money and pleasing shareholders. Credit unions are non-profit entities. The money you deposit in local banks and credit unions is also more likely to stay in your community. It gets used to make loans to small businesses and homeowners in your region.

If you decide switching financial institutions is a good idea, make sure you do some research and shop around. Compare rates and fees to find the right fit for your finances and lifestyle.

ATMs, Direct Deposits and Minimum Balances

Bank of America customers were being told to use an ATM to periodically withdraw money and use cash instead of their debit cards. There are some pros and cons to this approach. We’ve all cringed when stopping at an out-of-network ATM and hitting “Yes” to accept an additional fee. If you choose this strategy to avoid other bank fees, be aware the ATM fees could start piling up just as easily. Try to use only ATMs that are in your network and free of fees.

However, if you bank somewhere that reimburses ATM fees, it’s a great plan. They say “cash is king” for a reason. It’s accepted everywhere and can also help you stick to your budget. You’ll be more aware of how much you’re spending when you have to pull crisp green bills out of your wallet instead of simply swiping a plastic card.

Two of the most common ways to avoid bank fees are meeting requirements for direct deposits and maintaining a specific minimum balance. Most of us now have our paychecks direct deposited, but some financial institutions may ask for a minimum of two direct deposits in order to get certain fees waived.

Minimum balance requirements can also vary between certain accounts and banks. For instance, Citibank recently announced a restructuring of its checking account fees. Customers with Citi’s EZ Checking account have to carry a minimum balance of $6,000 or they’ll be charged a $15 monthly fee. It’s unlikely that the average American keeps at least 6-grand in their checking account. Customers did have the option of switching to other types of checking accounts with lower minimum balance conditions.

Two other common loopholes to avoid fees include having your monthly bank statement sent in an email instead of getting a paper copy, and signing up for online bill pay through your bank.

Do Your Research

If you don’t know what fees your bank is charging you, then you better find out. Ask questions, look online and closely examine your monthly statement for charges. Different financial institutions have different fees, and some can get pretty annoying. Your bank might be charging you for having a monthly statement sent in the mail. You could be charged a fee for talking to a teller when you visit your bank in person or having coins counted and cashed. You may even be charged for redeeming rewards points from debit or credit cards. Obviously, you won’t be able to avoid bank fees if you don’t know what they are. It’s your money. So take the time to look into what you may be missing.

For those of you who decide it’s best to part ways with your current financial institution, make sure you follow the right steps. Don’t close your old account before opening a new one. Transferring your money electronically is the safest way. Make sure all purchases and bills have cleared before moving all your money, and get a written statement confirming your old account was closed. By the way…your bank just might charge you one more annoying fee for closing that account.

About the Author: Kasey Steinbrinck is a former TV news producer and newspaper reporter who now writes about personal finance, the economy and consumer news for Check Advantage. The online printer of business checks and personal checks is dedicated to providing useful financial information to all consumers.