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4 Moves That Make Your Bank Account More Expensive

Finding a completely free checking account can be like searching for a needle in a haystack these days. It seems as though banks are tacking on fees left and right. In fact, one recent study reports that Americans pay about $151 a year in fees for a basic checking account and the cost keeps climbing. If you’re engaging in any of these bad banking habits, you could be making things worse.

Find out now: Which checking account is best for me?

1. Using Just Any Old ATM

Hitting the ATM for some quick cash seems harmless, but you can’t go around sticking your card into random machines. If you do, you run the risk of getting hit with not one but two separate charges for using a foreign ATM: one from the company that owns the machine and another from your own bank.

The combined average fee per transaction is $4.35. If you make a withdrawal at an out-of-network ATM just once a week, you’ll end up paying more than $226 in fees per year. Using only your own bank’s ATM or getting cash back when you make a purchase are two of the best ways to dodge the added cost.

2. Overlooking the Minimum Balance Requirements

4 Moves That Make Your Bank Account More Expensive

Having to keep a certain amount of money in a bank account is another way that customers get stuck paying fees. Many checking accounts have some type of minimum balance requirement and fees for failing to meet it can be as high as $15.

If you don’t want to have to fork over more money, you need to know what your bank’s rules are. For instance, some banks waive the fee if you have a set number of direct deposits into the account each month. You may also be able to get around it by linking to another account or setting up a qualifying bill payment.

Related Article: 4 Signs It’s Time to Switch Banks

3. Not Closing Old Accounts Properly

Moving from one bank to another can be a pain and it’s important to make sure you’re dotting the i’s and crossing the t’s once the switch is complete. If you leave an old account open, the bank could go ahead and charge you a service fee for not meeting the minimum balance requirement.

Even if you close the account, it can still be reopened if a recurring deposit or payment is allowed to go through. If a bill payment leaves your account with a negative balance, then you’re looking at overdraft fees and returned item fees. Most overdraft fees are right around $30 and since some banks charge as many as six in one day, you’ll want to make sure those old accounts are shut down for good.

4. Opting Into Overdraft Coverage

4 Moves That Make Your Bank Account More Expensive

With such high overdraft fees, opting into overdraft protection seems like a no-brainer. But it may actually cost you more in the long run. When you opt in, the bank replaces the standard overdraft with another fee that’s assessed any time you use more money than you have to cover a purchase.

A 2014 report from the Consumer Financial Protection Bureau found that customers who opted into overdraft protection paid about $21 a month in bank fees versus almost $3 a month for those who didn’t opt in. Overdraft protection can come in handy if you’re worried about running your account into the red, but it’s best to know what you stand to pay if you sign up.

5 Unnecessary Fees to Cut Out of Your Budget

Go Mobile If You Want to Cut Down on Fees

If you’re comfortable leaving your brick-and-mortar bank behind, jumping ship for a mobile-only bank can help you sidestep some fees. You’re giving up the convenience of being able to walk into a branch any time you want. But when you consider how much money you can save, it may be worth the sacrifice.

Photo credit: ©iStock.com/DragonImages, ©iStock.com/Сергей Хакимуллин, ©iStock.com/LewisTsePuiLung

Rebecca Lake Rebecca Lake has been writing about the nuts and bolts of personal finance for nearly a decade. She is an expert in investing, retirement and home buying topics. Her work has been featured on The Huffington Post, Business Insider, CBS News, U.S. News & World Report and Investopedia. As a homeschooling mom of two, she's always looking for ways to make the most of every dollar.
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