Do you know how much you pay each month in bank fees? Credit card fees? Late fees? Are there ways to reduce these expenses that eat away at your monthly income?
My use of the term vampire costs is adapted from the electric utilities. That is, there are appliances in our homes that use electricity even though they are turned off – and so they suck power all of the time. The simplest remedy for these kinds of appliances is to unplug them when they are not in use.
When I apply this term to banking, I ask the question: Are your funds sucked away for things that can be avoided, like unplugging the appliance. And the answer is yes – if you are mindful of these charges.
I will always say, do your due diligence when investigating a bank or credit card. You have to read the fine print too! Knowing what they will charge for and knowing what the requirements are for free privileges is important when it comes to fees that can be avoided or totally eliminated.
Banks could charge you for each transaction conducted with a teller, ATM transaction fees (both in and out of network), check writing fees, insufficient funds fees, online banking fees, minimum balance fees and fees they are yet to invent. And with so many fees, it is important to know which ones you are paying each month. So be sure to examine your monthly statements for these vampire costs.
Now don’t forget to annualize this expense. It would be easy to say, well, its only $10/month. When you annualize your expenses, you may think differently. Fees that are only $10 per month now become $120 per year. This starts sounding like a bigger chunk of change and you will quickly find yourself asking: How can I avoid these charges?
Avoiding some bank charges is accomplished with minimum balances. Free checking is possible if you keep a minimum balance in the account. And even better, interest bearing checking accounts are not only free but your funds also accumulate interest on the monthly balance. But the kicker is that you must maintain a minimum balance. If you don’t there can be high fees levied on your account. Bottom line here is simple: Avoid these costs by maintaining the required minimum balance!
All of this may sound like duh, isn’t this common sense. And my answer is yes but I will bet you will be surprised first by how much you are paying for bank fees, followed by I need to be more careful. Again, it’s like that appliance that sucks electricity even while it’s off – duh, all I have to do to save money is to unplug it. So, start unplugging those bank fees today!
The same holds true for credit cards. You must ask the question: What are you paying in fees each year that can be avoided?
Late fees, annual fees, cash advance fees and more could find their way to your credit card bill each month. All of these are avoidable when you plan to spend your money by avoiding these unnecessary charges.
Don’t let the banks and credit card companies suck your hard earned money out of your wallets! Be mindful of all of these fees and move to a different bank or credit card company if there are no easy ways to avoid paying their fees. There is plenty of competition out there and I’m sure that you can find an institution that will meet your needs.
Lastly, if you switch to a new bank or credit card, be mindful of “sign on now” pricing that could change in three, six or twelve months into your relationship with the institution. You have to remember that there are no free lunches out there and so you have to look to where and how charges or fees will creep into your account.
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