Is Your Bank Bleeding You?

It’s a simple principle of stewardship: Do not waste resources which are under your control.

When it comes to banks, don’t believe the marketing – banks are not your friend. They exist to make themselves money, not you. This isn’t wrong, but you have to realize that they are going to take your money at every possible and legal opportunity to do so.

A recent post at Forbes reveals a disturbing trend in the banking industry. Much like the baggage fiasco among various airlines (I have to pay for my luggage now?), banks are finding new ways to make money. Among them? Raising ATM fees, overdraft fees, monthly service fees, and increasing the minimum balance required in an account in order to qualify for free checking.

These aren’t huge increase, but over the span of a year can cost you hundreds if you’re not careful.

The ATM fees and overdraft fees are easy to avoid. Simply use your bank’s ATM, and manage your money well so that you don’t incur overdraft fees.

You’re losing money every month that could be invested elsewhere if you’re paying for your checking account. I have five accounts with Bank of America, all free. However, I had to jump through some hoops to achieve that. This includes having direct deposit into one of the accounts, having a mortgage with BOA, and keeping a minimum account balance in other accounts.

There are free options out there, so do your research to save yourself from having to pay for a checking account. The first step would be to talk to a representative at your local branch. They can advise you of your options for free checking. If none exist, take your businesses somewhere else.

According to Bankrate, 72% of credit unions offer free checking, compared to just 45% of banks. “Free” means there is no standard monthly service fee (usually between $10 – $15), but you can still incur fees for overdrafts and other activities.

 You have to be smart when choosing where to keep your money. If you have 2-3 accounts, all charging you a monthly “maintenance” fee, then you need to make some changes immediately. Bankrate has a comparison feature which is a great place to start if your bank will not offer you free checking. But don’t be afraid to negotiate! Let them know why you’re leaving and they just may give you what you want. In life, you don’t get what you deserve; you get what you ask for.

Committed to your success,

-Wesley

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