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MONEY MATTERS
you had $600 in your account, processing a payment for $590 before three
transactions of $25 each results in three
overdraft fees. Processing the smaller
sums first prompts just one.
THE FIX If you’re prone to overdrafts,
sign up for e-mail or cell-phone alerts to
notify you when your account balance
is getting low. Also, opt out of your
bank’s overdraft protection program;
this may mean some debit transactions
are rejected but at least you won’t incur
fees. If you have the extra money, set up
another account that can back up your
main account in case of an overdraft.
There may still be fees for transferring
funds from one to the other, but at about
$5 per transaction they’re cheaper than
overdraft charges.
CREDIT-CARD QUEEN
While it’s easy today to get cards with
no annual up-front costs, they often
have back-end penalty fees. Late fees
and over-limit fees average $35 each,
more than triple eight years ago. And
credit-card companies are increasingly aggressive in imposing them. In
the 1980s, cardholders could often
pay up to 15 days after their due date
without risking a late fee. Now fees are
assessed if payment fails to arrive by
midafternoon on the due date. And
whereas many cardholders were once
able to go over their credit-line limit by
5 to 20 percent without penalty, today
over-limit fees are imposed anytime a
balance exceeds a credit line.
Sometimes your credit-card company will decline a transaction if it will
exceed your limit; other times a merchant may not be electronically linked
to the credit card’s network at the time
the charge is put through. Yet even if
the transaction is blocked, you could
be charged a fee for trying to exceed
your limit—or interest charges and
other fees for a late payment could
push you above your limit.
LADIES’ HOME JOURNAL
MAY 09
If you try to transfer the balance from
one credit card to another for a lower
interest rate, you could also get hit with
a heavy fee. When credit was more
easily available a few years ago,
balance-transfer offers were usually
free; now there’s a 3 to 5 percent
charge on the transferred amount. Today transferring a $5,000 balance with
a 4 percent fee could cost you $200.
THE FIX Always be sure to read
the fine print of any credit-card offer.
Also, sign up for e-mail or text-message alerts to notify you when
you’re close to your credit limit or billing due date. You can also have your
credit-card company automatically
debit your bank account when your
bill is due—but make sure there’s
enough money in that account or
you’ll risk the overdraft fee.
It’s A Fee
For All!
¨ Wire transfers: $15–25 from the
bank transferring the money and
$5–15 from the accepting bank.
¨ Stop payment on a check:
$30 per item
¨ Paying credit-card bill by
phone: $3–$15
¨ Money orders and cashier’s
checks: $5
¨ Reviewing a bank statement
at an ATM: $1–$2
¨ ATM or debit-card
replacement fee: $5 to $20;
$50 for expedited service
¨ Online bill-payment service:
$6–$10 a month
If you are charged a fee, call your
bank immediately. The bank might just
be willing to waive a late fee or bump
up your credit line if you have a good
payment record.
ATM ABUSER
The convenience of using automated
teller machines comes with a price,
especially if you use a machine unaffiliated with your bank. Banks charge
noncustomers an average of $2 for
using their ATMs, and your own bank
may impose an additional $2 fee for
using another bank’s ATM. If you only
withdraw $40, you’ve just paid a 10
percent fee for the transaction.
THE FIX Of course you know you can
avoid fees by using ATMs in your own
bank’s networks. But there’s another
way around fees in case your bank’s
ATM is not nearby: Use your debit card
at a store to buy a small item (such as
gum) and ask for additional cash back
in the transaction.
Better still, switch to a bank that
waives ATM fees. The nation’s fifth-largest bank, PNC, for example, reimburses ATM fees charged by another
bank if you maintain a monthly $2,000
balance. And if you have a USAA bank
account you can get up to a $15
monthly refund for ATM fees.
SERVICE SEEKER
At some banks it’s no longer free to
deal directly with a teller. Depending
on the kind of account you have, you
may be allowed two or three free teller
transactions a month before you’re
charged $2 for each subsequent one.
And there’s a similar customer-service
fee if you could have completed a
transaction via an automated system.
THE FIX If you want personal service,
make sure you have an account that
doesn’t charge for it. Many banks don’t
disclose such details until you open an
account, so ask at the outset.
