Banking Fails – Don’t Make These Banking Mistakes

By January 18, 2016Personal Finance

Let’s face it, there’s nothing sexy about banking. A trip to the mall is a fun outing, but shopping for a checking and/or savings account can seem tedious and boring. While it may not make for a fun afternoon, comparison shopping is key to securing great rates, returns and financial security.

When looking for ways to improve your personal finances, start by looking at the way you bank. Take a deep look at your banking statements, and look for fees and other charges you could be avoiding.

Here’s a list of banking mistakes to avoid in 2016:

Paying a monthly maintenance fee on a checking account

Some banks charge a fee each month for “maintaining” your checking account. This fee can be over $10, which will cost you $120 every year. Many banks offer ways to avoid this fee, including making sure your account balance meets the minimum requirement. For online checking accounts this can be as little as $25. That means by keeping as little as $25 in your account at all times you can avoid the maintenance fee. The most common way to avoid maintenance fees on your checking account is by setting up direct deposit. If you have your paycheck directly deposited into your personal checking account you could avoid the monthly fee. Many banks require an initial deposit when opening a checking account. This amount can be as little as $100 and as high as $1,500. If you have difficulty keeping your balance consistent, shop around for the bank with the lowest requirement on a core checking account.

Thinking you’ve opted out of overdraft protection

In simpler times you could only spend money you had, whether it was in the form of cash or via our debit card. Banks initiated overdraft protection, so that customers could spend up to a certain amount even if they’re short of funds. This provides the customer with the ability to pay a bill or make a purchase even if they have insufficient funds. It may be that your check arrives a day late or was postponed by a holiday, you could have forgotten to cash a check or move funds around. Whatever the reason overdraft protection can help you avoid an embarrassing encounter. It can also cost you heavily at the bank. One minor mistake can lead to hundreds of dollars in overdraft fees. You can be charged up to $38 for every purchase made over your balance. By opting out of overdraft protection, you prevent the bank from allowing you to make certain purchases when you have insufficient funds. You can opt out of overdraft protection on your debit or ATM card, but you can’t opt out of protection on checks, automatic debits or bill-payment transactions, according to Nick Clements contributor for Forbes magazine.

Using out-of-network ATMs

As we’ve previously told you about, ATM fees are on the rise and soaring. The good news is these fees are completely avoidable. By using an ATM from another bank you’ll be charged twice for removing funds, once by your bank and once by the owner of the ATM. To avoid these fees bank with a company that has a large ATM network. Do a little research and find out which bank has locations near your home and office, making it more convenient for you to bank.

Taking risks with your debit card

Debit cards don’t offer the same protection as credit cards do. According to the FTC, you have unlimited liability if you wait 60 days to report fraudulent activity. Waiting two business days to report fraud can mean your accountable for $500 of the spend. That’s unlike credit cards that will charge you a maximum of $50 of the fraudulent activity. Some credit cards like Visa promise zero liability, as reported in Forbes. To avoid fraudulent activity don’t use your debit card at the pump, and other areas where fraud is popular.

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