10 Strategies against the bank charges
Sunday, April 6, 2008 | | |by Lauren Tara LaCapra
Tuesday, April 29, 2008provided byTheStreet.com
Kevin Smith had enough of his bank.
The 27-year-old advertising executive closed its Bank of America accounts in mid-April after what he called a "non-stop barrage of charges and taxes." The latest round of surcharges began when Smith incurred a charge for attempting to transfer more funds than are available from one account to another. He then hired a second charge of having sufficient funds to cover the initial charge.
The vase has come when Smith asked the Bank of America to complain. He met what he considered discourteous as a customer service representative, who noted that other banks charge these fees as well. Bank of America quickly lost a customer.
More from TheStreet.com:
• Non Line of credit for you!
• My interest rate is increased to What?
• a credit card debt: the next possible implosion
Bank of America says it has set up dozens of tools and services - such as alerts by e-mail, protection and interactive features on its Web site - to educate consumers and help them avoid such fee. "We want to work with all our customers," explains a representative ", whether by phone, in person or online."
The charges are a common complaint for customers of all types of banks beyond the Bank of America. Lower interest rates, a fierce competition to attract customers with accounts to higher yielding and unrest in mortgages and credit markets have left the banks to tap into other revenue streams.
The banks have $ 38.63 billion on service fees last year - the costs of ATMs, bounced checks, overdrafts and others - which was 8.3% higher than in 2006. These fees represent a larger share of noninterest income in 2007 than they had in 12 years.
Some outlets have simply raised the surcharges, while others have hidden costs in new places, so many that they do not even know existed. For example, advertising for banks cheques as "free" if there is no monthly maintenance fees. However, other costs involved with these accounts are less pronounced - banks do not plaster fresh disclosures on billboards in the same way they do "control free" offer.
"Consumers have no idea that their bank is not their friend," said Ed Mierzwinski, program director of the Consumer USA to Public Interest Research Group. "You must understand that the consumer that Banks offer free services control, but it is free check "lite" with all fees tacked on the back, "he adds.
While banks are required to declare all their expenses, including fine-print statements can be confusing, filled with jargon and sometimes difficult to find. A Government Accountability Office study released earlier this year indicated that banks are not doing their best to inform consumers about the tariffs. GAO staff visited 185 bank branches from 154 different companies and were "unable to obtain further information and fees account the terms and conditions" to more than one fifth places.
Banks Web sites are not always useful. Examine all terms and conditions of Washington Mutual "free" checking account online, for example, must first "complete the account opening process." A customer service representative reached by phone could not find a tax declaration online.
Credit unions tend to be more consumer-friendly than large chains, said Greg Daugherty, executive editor of Consumer Reports, but they tend to have fewer branches and services. "The trick for consumers is to find the right combination of services and amenities that you really need, without the taxes you do not need," suggests Daugherty.
Informed, consumers can protect themselves better than those who sit back and let the charges accumulate.
Below are the 10 best ways to your bank may be undermining your money and how you can protect yourself against the onslaught of charges:
1. Overdrafting
Most major banks automatically include consumers in a program in which the bank automatically cover checks or debit charges to a certain amount, even when the consumer has insufficient funds. The advantage is that consumers do not have to pay merchants to bounce checks and their purchase is covered. The catch, these mini-loans are not free.
Banks generally charge $ 20 to $ 35 each time a customer tries to withdraw more than they have in an account. The choice of this task is delicate and not always possible. Some banks also offer overdraft protection, which transfers money from another account money than you've exceeded. This service also comes with a fee, but it may cost less than overdrafts.
Mierzwinski suggested holding a cushion of a few hundred dollars in the checking account at all times to avoid overdrafts in the first place. It is also useful to monitor the credits and debits with an old check register - even for small purchases like a cup of coffee - to make sure you do not go above your limit.
2. Debit Cards
Debit cards are part of the reason why consumers are more common. If they are fast and convenient, they also lead to excess or confusion on the amount of money available. (It is easier to say when there is no money left in the wallet when you have slipped too long.)
Some outlets charge a fee for each debit card transaction-(ranging from 25 cents to $ 1.50) and, or for issuing the card in the first place.
Another bank tactic that hurts consumers is the treatment of debits and credits at the end of the day, starting with the largest. This may give rise to multiple charges discovered, regardless of the order in which the transactions took place.
For example, a consumer has $ 100 in his account. She made three debit cards for purchases during the day, a total of $ 50. Then a cheque for $ 125 is generated. If the bank starts with the highest point, it will face four charges discovered, not one.
Consumers should also beware of "holds" that some retail businesses place on the accounts. These temporary costs may exceed the amount you actually incurred. For example, a gas station may issue a $ 100 hold, if you meet with a value of $ 30 or gas with a value of $ 90. This opens once the transaction process, but may take days. It may be difficult if those on ATM screens "holds" are taken into account in the balance.
It is also, in most cases, a fee for replacing lost or stolen cards.
3. ATMs
Often, consumers hit twice for using an outside ATM network. A tax comes from the ATM and another of the card issuer. With many banks increasingly ATM costs $ 3 per slide, a score that $ 20 could pay 30% of this withdrawal in surcharges.
Also be wary of rising taxes when using your card abroad or inside casinos. These fees can be $ 5 per withdrawal or more from your bank alone.
4. Interest Rate
Although not technically a "tax", banks issuing credit cards often change in interest rates and other terms. The interest rate may increase because of economic changes, changes in your credit profile or because an "introduction" period of low interest rates or not expired. The late payment can lead to higher rates as well.
Banks may also change rates simply because they have decided, insofar as they inform customers. (It is usually done with a high density of wording, fine-print booklet that is mailed to the customer's home and quickly eliminated.)
Daugherty said complaints about unexpected increases in interest rates have become more frequent, even among those who have good credit assessments. "There is no obvious reason for their interest rates suddenly rose," he said. "These are the kind of people who pay their bills. We are hearing that the right and left at this point and you can not conclude that [banks] to make their money somewhere. "
5. Basics
With the abundance of "control free" offers, the cost base to maintain an account or dropping below a minimum balance became less frequent. These fees vary considerably between different banks and accounts.
If you get attached to these costs, and you want to switch to a new type of account, make sure you are aware of all costs associated with the new - and commutation.
There may also be other costs for the remains of the old World Bank, as the paper statements or hard copies of checks processed.
6. The late payment
When the credit card companies receive payments late, they tend to turn on a fee, usually around $ 35. If you're paying bills online, do not assume that the day you make a payment is the day she posts. This is not always the case. Payments may take up to five working days to clear, meaning that the opening of their early is the key.
Some Web sites automatically date of the payment due date, to verify that digital calendar at the online payment. You can also schedule automatic payments, which cover at least the minimum balance with sufficient time. Otherwise, call your bank and credit card company to determine the days to pay and set a reminder for yourself.
7. A stop payment
Most banks charge fees of about $ 20 to $ 30 to stop a payment processing. By avoiding the tax, time is of the essence.
It is best to call your bank as soon as possible and try to negotiate a free courtesy. With online payments, if you make the mistake quickly, your bank May be able to stop the process without charge. The judgement of paper checks is more delicate and may not be free because of the added effort and risk the bank takes to track down the check manually.
8. Human Interaction
Beware of some banks impose surcharges to interact with representatives. If there is an automated system, you can use the bank May you be charged for access time employees instead.
If you work with a representative or any "unusual" applications - as the exchange of currency or trade coins for bills - make sure there is no fee imposed. There was reports of oddball fees charged for visiting a bank too frequently or be prepared for a drive-through window as well, but those who seem to be more the exception than the rule.
At the other end of spectrum, also beware of charges for online banking or using automated telephone systems.
9. Dormant accounts
Have you officially closed checking account with your old bank which has only $ 2.07 left? Make sure better. Some outlets will charge a monthly fee for non-performance of all transactions over a long period of time. If taxes account for more than balance, you could be labelled with the costs and discovered.
If you go on an extended vacation or you are a student returns home for the summer, it is wise to make sure your bank will not receive any punishment. If so, you may want to switch to another type of account or a new bank.
10. The closure of account
Yes, even banks charge to close the accounts - anywhere from $ 5 to $ 35, according to the terms of the agreement.
Most of these taxes apply only if you close the account before a period of time, like six months or a year. College students are particularly sensitive to these costs, said Mierzwinski, because they opened an account May near a school, but eventually transfer to another State or know that there are no branches back at home.
If you open an account with an early closure costs, you can take most of the funds - while maintaining the minimum balance, if any - and expect to close the account until that the term expires. You can ask whether there are gaps or waivers of courtesy, but the bank is not likely to lend a hand to end a business relationship.
Tuesday, April 29, 2008provided byTheStreet.com
Kevin Smith had enough of his bank.
The 27-year-old advertising executive closed its Bank of America accounts in mid-April after what he called a "non-stop barrage of charges and taxes." The latest round of surcharges began when Smith incurred a charge for attempting to transfer more funds than are available from one account to another. He then hired a second charge of having sufficient funds to cover the initial charge.
The vase has come when Smith asked the Bank of America to complain. He met what he considered discourteous as a customer service representative, who noted that other banks charge these fees as well. Bank of America quickly lost a customer.
More from TheStreet.com:
• Non Line of credit for you!
• My interest rate is increased to What?
• a credit card debt: the next possible implosion
Bank of America says it has set up dozens of tools and services - such as alerts by e-mail, protection and interactive features on its Web site - to educate consumers and help them avoid such fee. "We want to work with all our customers," explains a representative ", whether by phone, in person or online."
The charges are a common complaint for customers of all types of banks beyond the Bank of America. Lower interest rates, a fierce competition to attract customers with accounts to higher yielding and unrest in mortgages and credit markets have left the banks to tap into other revenue streams.
The banks have $ 38.63 billion on service fees last year - the costs of ATMs, bounced checks, overdrafts and others - which was 8.3% higher than in 2006. These fees represent a larger share of noninterest income in 2007 than they had in 12 years.
Some outlets have simply raised the surcharges, while others have hidden costs in new places, so many that they do not even know existed. For example, advertising for banks cheques as "free" if there is no monthly maintenance fees. However, other costs involved with these accounts are less pronounced - banks do not plaster fresh disclosures on billboards in the same way they do "control free" offer.
"Consumers have no idea that their bank is not their friend," said Ed Mierzwinski, program director of the Consumer USA to Public Interest Research Group. "You must understand that the consumer that Banks offer free services control, but it is free check "lite" with all fees tacked on the back, "he adds.
While banks are required to declare all their expenses, including fine-print statements can be confusing, filled with jargon and sometimes difficult to find. A Government Accountability Office study released earlier this year indicated that banks are not doing their best to inform consumers about the tariffs. GAO staff visited 185 bank branches from 154 different companies and were "unable to obtain further information and fees account the terms and conditions" to more than one fifth places.
Banks Web sites are not always useful. Examine all terms and conditions of Washington Mutual "free" checking account online, for example, must first "complete the account opening process." A customer service representative reached by phone could not find a tax declaration online.
Credit unions tend to be more consumer-friendly than large chains, said Greg Daugherty, executive editor of Consumer Reports, but they tend to have fewer branches and services. "The trick for consumers is to find the right combination of services and amenities that you really need, without the taxes you do not need," suggests Daugherty.
Informed, consumers can protect themselves better than those who sit back and let the charges accumulate.
Below are the 10 best ways to your bank may be undermining your money and how you can protect yourself against the onslaught of charges:
1. Overdrafting
Most major banks automatically include consumers in a program in which the bank automatically cover checks or debit charges to a certain amount, even when the consumer has insufficient funds. The advantage is that consumers do not have to pay merchants to bounce checks and their purchase is covered. The catch, these mini-loans are not free.
Banks generally charge $ 20 to $ 35 each time a customer tries to withdraw more than they have in an account. The choice of this task is delicate and not always possible. Some banks also offer overdraft protection, which transfers money from another account money than you've exceeded. This service also comes with a fee, but it may cost less than overdrafts.
Mierzwinski suggested holding a cushion of a few hundred dollars in the checking account at all times to avoid overdrafts in the first place. It is also useful to monitor the credits and debits with an old check register - even for small purchases like a cup of coffee - to make sure you do not go above your limit.
2. Debit Cards
Debit cards are part of the reason why consumers are more common. If they are fast and convenient, they also lead to excess or confusion on the amount of money available. (It is easier to say when there is no money left in the wallet when you have slipped too long.)
Some outlets charge a fee for each debit card transaction-(ranging from 25 cents to $ 1.50) and, or for issuing the card in the first place.
Another bank tactic that hurts consumers is the treatment of debits and credits at the end of the day, starting with the largest. This may give rise to multiple charges discovered, regardless of the order in which the transactions took place.
For example, a consumer has $ 100 in his account. She made three debit cards for purchases during the day, a total of $ 50. Then a cheque for $ 125 is generated. If the bank starts with the highest point, it will face four charges discovered, not one.
Consumers should also beware of "holds" that some retail businesses place on the accounts. These temporary costs may exceed the amount you actually incurred. For example, a gas station may issue a $ 100 hold, if you meet with a value of $ 30 or gas with a value of $ 90. This opens once the transaction process, but may take days. It may be difficult if those on ATM screens "holds" are taken into account in the balance.
It is also, in most cases, a fee for replacing lost or stolen cards.
3. ATMs
Often, consumers hit twice for using an outside ATM network. A tax comes from the ATM and another of the card issuer. With many banks increasingly ATM costs $ 3 per slide, a score that $ 20 could pay 30% of this withdrawal in surcharges.
Also be wary of rising taxes when using your card abroad or inside casinos. These fees can be $ 5 per withdrawal or more from your bank alone.
4. Interest Rate
Although not technically a "tax", banks issuing credit cards often change in interest rates and other terms. The interest rate may increase because of economic changes, changes in your credit profile or because an "introduction" period of low interest rates or not expired. The late payment can lead to higher rates as well.
Banks may also change rates simply because they have decided, insofar as they inform customers. (It is usually done with a high density of wording, fine-print booklet that is mailed to the customer's home and quickly eliminated.)
Daugherty said complaints about unexpected increases in interest rates have become more frequent, even among those who have good credit assessments. "There is no obvious reason for their interest rates suddenly rose," he said. "These are the kind of people who pay their bills. We are hearing that the right and left at this point and you can not conclude that [banks] to make their money somewhere. "
5. Basics
With the abundance of "control free" offers, the cost base to maintain an account or dropping below a minimum balance became less frequent. These fees vary considerably between different banks and accounts.
If you get attached to these costs, and you want to switch to a new type of account, make sure you are aware of all costs associated with the new - and commutation.
There may also be other costs for the remains of the old World Bank, as the paper statements or hard copies of checks processed.
6. The late payment
When the credit card companies receive payments late, they tend to turn on a fee, usually around $ 35. If you're paying bills online, do not assume that the day you make a payment is the day she posts. This is not always the case. Payments may take up to five working days to clear, meaning that the opening of their early is the key.
Some Web sites automatically date of the payment due date, to verify that digital calendar at the online payment. You can also schedule automatic payments, which cover at least the minimum balance with sufficient time. Otherwise, call your bank and credit card company to determine the days to pay and set a reminder for yourself.
7. A stop payment
Most banks charge fees of about $ 20 to $ 30 to stop a payment processing. By avoiding the tax, time is of the essence.
It is best to call your bank as soon as possible and try to negotiate a free courtesy. With online payments, if you make the mistake quickly, your bank May be able to stop the process without charge. The judgement of paper checks is more delicate and may not be free because of the added effort and risk the bank takes to track down the check manually.
8. Human Interaction
Beware of some banks impose surcharges to interact with representatives. If there is an automated system, you can use the bank May you be charged for access time employees instead.
If you work with a representative or any "unusual" applications - as the exchange of currency or trade coins for bills - make sure there is no fee imposed. There was reports of oddball fees charged for visiting a bank too frequently or be prepared for a drive-through window as well, but those who seem to be more the exception than the rule.
At the other end of spectrum, also beware of charges for online banking or using automated telephone systems.
9. Dormant accounts
Have you officially closed checking account with your old bank which has only $ 2.07 left? Make sure better. Some outlets will charge a monthly fee for non-performance of all transactions over a long period of time. If taxes account for more than balance, you could be labelled with the costs and discovered.
If you go on an extended vacation or you are a student returns home for the summer, it is wise to make sure your bank will not receive any punishment. If so, you may want to switch to another type of account or a new bank.
10. The closure of account
Yes, even banks charge to close the accounts - anywhere from $ 5 to $ 35, according to the terms of the agreement.
Most of these taxes apply only if you close the account before a period of time, like six months or a year. College students are particularly sensitive to these costs, said Mierzwinski, because they opened an account May near a school, but eventually transfer to another State or know that there are no branches back at home.
If you open an account with an early closure costs, you can take most of the funds - while maintaining the minimum balance, if any - and expect to close the account until that the term expires. You can ask whether there are gaps or waivers of courtesy, but the bank is not likely to lend a hand to end a business relationship.
