Finding ways to avoid bank fees

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Banking Fees -- Hunt for a no-frills online bank that doesn't have to maintain hundreds or even thousands of branches to avoid rising checking account and ATM fees.

When many major banks announced late last year they would begin charging their customers for using their debit cards, consumers threatened to close their accounts and take their business to a bank or credit union that didn't charge the debit usage fees. The banks listened to the outcry and many quickly changed course and scrapped those plans.

Banks will likely continue to come up with other ways to recoup those transaction fee losses. Among the fees already proposed or in place are penalties for not maintaining a minimum balance and even for not using your debit card enough by the bank's minimum usage requirements. Old standbys include penalties for using out-of-network cash machines and overdraft charges.

According to a nationwide Angie's List poll:

  • 87 percent of Angie's List poll respondents have a debit card
  • Half of those respondents use their debit cards daily, compared to just 7 percent who use cash.
  • Nearly half of the respondents said they would switch banks if charged debit card usage fees
  • 86 percent of respondents say their bank charges fees for bounced checks; 49 percent are charged for overdraft protection and 27 percent are charged ATM fees.

Advice from Angie's List to avoid bank fees:

  • Read your statements: Take the time to thoroughly read your bank statements when they arrive. Look for new fees and other changes. Ask your bank what is needed to avoid monthly fees.
  • Go paperless: Some banks charge a fee to send a statement in the mail.
  • Set up an alert:Sign up for email or text alert that will notify you if you are about to fall below a balance threshold or incur a penalty fee.
  • Non-sufficient funds (NSF): Keep track of your transactions to avoid overdrawing from your account. Banks have made it easy by allowing consumers to access their account online. Some even offer mobile banking on cell phones.
  • Beware of ATM fees: Use only ATM's in your network or a bank that reimburses ATM fees. Some retailers also allow you to select cash back when you make purchases.
  • Direct deposit enrollment: Most checking accounts are free when you enroll in direct deposit.
  • Maintaining a minimum balance: Some accounts require a minimum balance. Know what your minimum balance is and maintain that to avoid paying a fee.
  • Find a new financial institution: If you are not happy with your bank, it's best to shop around to find a new one.

Angie's List tips for finding the right financial institution for you:

  • Determine your needs: Ask yourself about your financial goals in order to help determine what services a bank can offer you. Do you want free checking? Convenient ATMs?
  • Shop around: Check out various banks and credit unions to find a place that meets your criteria. Compare fees, services, and bank locations.
  • Keep it open: If you choose a new financial institution, do not close an account before opening a new one. It's important that all your transactions have cleared in your existing account.

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