Fees

Fees are a way financial institutions offset some operating costs and generate income. Most account holders don't even realize all of the fees a bank can charge until they show up on their monthly statements. It's in your best interest to know what you can and cannot be charged for when utilizing financial services.

Credit unions and banks operate in different modes and they schedule their fee structures differently. Do your homework at their Web sites or by making phone calls. It can save you money.

Typical Fees

Overdraft Fee
If you spend more money than you actually have in your checking account, you can be charged an overdraft fee. At many financial institutions, these fees now average $30 per item and can be as high as $45 for an NSF (non-sufficient funds) item.

To save yourself money and hassles, look into overdraft protection which is available in one form or another at all financial institutions.

Credit unions usually use your savings account as a backup. If you spend too much from checking and you have the money in savings, with your prior authorization, they will transfer the money needed to cover an overdraft. You may pay a small transfer fee versus a large overdraft fee.

Many financial institutions open a credit account for you as overdraft protection. That means if you spend too much in checking, they can charge the excess amount to your credit account and start charging you interest in addition to any overdraft fees they may charge. ALWAYS READ THE FINE PRINT!

ATM Fees
All financial institutions have an ATM network they would prefer you to use. If you go outside of that network and use what they term a “foreign” ATM, you could be charged a fee. Be sure you know which ATMs you can use with no fee and make it a priority to use them to avoid ATM fees.

Over-the-Limit Fee
With a credit card, if you exceed the credit limit on your card, you could be charged a fee.

Late Payment Fee :
If you miss a credit card or loan payment due date, the financial institution can add a late payment fee to your balance due.

FOR EXAMPLE:
Let’s say you have a credit card with a $500 limit and you have charged $480 to that card. You accidentally forget to make a payment. Now the card issuer can charge you a late payment fee. In this example, it will be $25. However, you only have $20 left on your card limit. So that brings your balance to $505. Now, you'll be charged an over-the-limit fee plus another $25 for missing your payment due date. Your new account balance is $530. Oh and by the way, at this financial institution, you automatically default to a higher interest rate because you missed a payment and you exceeded your limit. Your credit card is now costing you over 20% in interest on your unpaid balance every month.

Contact Fee
Some financial institutions will charge you a fee if you call and speak to a service representative or if you visit a branch and talk to an employee.

Account Maintenance Fee
This is a pretty general term that is used to describe a lot of miscellaneous fees. It could be because you didn’t maintain a minimum balance in your account. It might also be because you used your debit card too often.

The bottom line is you should shop around and compare fees and rates before choosing a financial institution. Ask for a copy of the fee schedule for all the accounts you are considering.

Stay on top of your accounts as well. Always balance your checkbook monthly and pay your bills on time to avoid any unnecessary fees.