Checking Account Traps: 6 Small Mistakes That Can Add Up Big Over Time
Written by
Brooke Barley
Edited by
Rebekah Evans
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A few dollars here and there might not seem like much, but checking account fees can get very expensive. If customers don’t keep track of their banking activity and preferences, they could be charged hundreds of dollars. Read on to find out about the costly banking mistakes experts want customers to look out for.
Overdraft Fees
The dreaded overdraft fees can add up if customers make them a habit. Geri Hopkins, chief operating officer (COO) at Skyla Federal Credit Union, recommended that people make sure they have overdraft protection to avoid paying these fees.
“A common mistake people make is not linking their savings account or personal line of credit to their checking account for overdraft protection,” Hopkins said.
“By not doing this, any transaction that puts your checking account balance into negative territory could cost you big time in the form of overdraft fees,” she added. “Luckily many institutions offer overdraft protection at little to no cost when you link to a savings account or personal line of credit.”
ATM Fees
Some ATMs will charge as much as $5 to get cash out of the bank. Hopkins recommended looking into multiple bank options to see which one benefits customers most when it comes to withdrawing cash.
“Always check your bank’s fees and policies before using random ATMs. Opt for banks that reimburse ATM fees,” Hopkins added.
Foreign Transaction Fees
Going on an international trip is already expensive, but Hopkins warned it can get even worse with a bank’s foreign transaction fees. “Making international purchases can cost you 1% to 3% per transaction,” Hopkins explained.
She recommended that those who travel frequently ask the bank for their policies on foreign transactions and see if there is a card they can use that doesn’t charge transaction fees.
Not Maintaining a Minimum Balance
Some banks will charge customers if they don’t keep a certain amount of cash in the bank. “Using your checking and savings accounts frequently and draining their combined balance below a set amount could trigger a low balance fee,” Hopkins added.
She advised making sure a bank doesn’t have these requirements for customers who will have fluctuating account balances.
Inactivity
“Doing nothing and leaving your accounts untouched for extended periods of time can also be draining your funds because of inactivity fees,” Hopkins said. One tip she offered is to automate small monthly transactions to maintain activity.
Paper Statements
“This may sound silly, but banks are increasingly charging $2 or more per month for paper statements,” Hopkins added. To avoid this, Hopkins recommended customers switch to digital statements and push notification alerts for low balances.
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