5 On Your Side

Read fine print to avoid bank fees

Posted March 8, 2013 7:03 p.m. EST

If you’ve noticed your banking and financial service fees going up, you’re not imagining it. Thanks to new rules and regulations restricting banks from making certain kinds of risky investments, they are finding new streams of revenue.

But experts say that there are steps you can take to avoid paying a price for the nation’s well-intended but costly new banking reforms.

 “Now more than ever, reading the fine print is a must if you want to protect yourself from higher fees and surprises,” says Shari Olefson, legal, financial, and real estate expert and author of the new book, “Financial Fresh Start: Your Five-Step Plan for Adapting and Prospering in the New Economy.”

Here are some tips to avoid pitfalls and bank smarter in the new economy:

Compare: Just as you might shop prices for a manicure or personal trainer, shop for bank and financial services too. Compare at least three different banks and the details on services you need. What are the fees associated with these services and what are the requirements you have to meet to avoid penalties?

Explore alternatives: Consider switching to a smaller bank, credit union or online bank to avoid paying certain fees. Fees can also sometimes be avoided by consolidating accounts and credit cards, or by switching to a less expensive service, such as away from a premium account to basic checking.

Look specifically for banking services to which the new rules don’t apply. For example, banks with less than $10 billion in assets are exempt from many of the new rules and reforms.            

Monitor rewards: Some banks and financial service companies are aggressively cutting expenses. So if you use your bank’s reward program, watch for signs that the program may change or be phased out. “You want to be able to use your rewards before you risk losing them,” says Olefson.     

Practice overdraft prevention: Keep a cushion in your account. Try tracking spending manually, using an old-fashioned paper register to spend more mindfully and pay your bills manually, too, since auto-payments are among the leading causes of account overdrafts. If you do become overdrawn, be sure to pay fees quickly to avoid being charged again for the original offense.

Stick to your own ATMs: Plan your ATM visits and cash needs in advance to avoid using another bank’s ATM machines.

Rinse, wash, repeat: “Like most other businesses, banks innovate, especially when it comes to the potential types of new fees they can charge, even under the new rules and reforms,” Olefson observes. “These innovations are never-ending. Periodically revisit the financial services you use and how much they cost in order to ensure you’re paying the least amount possible.”

More tips for thriving in the new economy and information about “Financial Fresh Start,” by Shari Olefson, can be found at www.FinancialFreshStartTheBook.com.

Take steps today to ensure that your banking and financial services are working for, and not against you.