Are Checking Account Fees Hampering Your Budget?

by Miranda Marquit · 0 comments

When it comes to frugal living, one the best thing you can do is look for some of the small things that are draining away your wealth. You might just be surprised at how much money you are spending on simple things like your checking account.

A few years ago, outrage over checking account fees forced the banks to slow down in their effort to raise rates. Now it looks like banks are ready to start raising rates again. A recent analysis by MoneyRates finds that the typical American household pays $159 per year in checking account fees. Interestingly, this analysis finds that this is the cost of maintaining the checking account, and doesn’t include overdraft fees or ATM fees.

While it might not seem like a lot to pay on a yearly basis, to someone committed to living a frugal lifestyle, it is clear that that money could be used for other purposes. It could be a car payment, or a week’s worth of groceries, or the fees for your child to participate in an extracurricular activity.

It’s More Difficult to Avoid Checking Account Fees

One of the reasons that these fees are on the rise is due to the fact that is becoming more difficult to avoid checking account fees. Many consumers avoid checking account fees by maintaining a minimum balance. Unfortunately, it is getting harder and harder to reach that minimum threshold. According to MoneyRates, in the last six months alone the amount needed to get a fee waiver rose by almost $800. Four years ago the average balance requirements to avoid a fee was $3,590.83. Today the average amount required in a checking account to avoid the fee is almost double that at $6,847.49.

When you look at the requirements, it is clear why some households are having trouble meeting the requirements and avoiding the checking account fees. MoneyRates reports that the average monthly maintenance fee free checking account is $13.29. Over time that adds up and can eat into your wealth and hamper your budget. This is especially true if you are on a tight budget and trying to meet goals like paying down debt.

Other Checking Account Fees that Will Cost You

While monthly maintenance fees can add up, other fees might be even more costly if you are careful. If you use an ATM that is out of the network you might pay almost $3 on average to get your money. If you regularly get money out of an ATM that is not your bank’s, those fees can add up fast. There are some banks that refund your fees, and they can be helpful.

You should also watch out for overdraft fees. Overdraft fees are some of the most expensive fees to consumers, and a major way that make money. Overdraft fees can cost as much as $45 per transaction, and that will really put you in the hole. It’s important to be careful to avoid spending more money than you have in your account so that you can avoid the fees that come with overdrafts, as well as returned charges.

If your bank is charging fees that are starting to add up and cut into your budget, it’s time to shop around for another bank. According to MoneyRates, almost 25% of checking accounts have no monthly service fee. These accounts are a good place to start.

Bonus Tip:

Another way to save on your monthly Internet and TV costs is to find a current ATT U-Verse coupon code or at least a promotion to knock down your home service bill.

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