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"Checking account fees surge. Here’s how to dodge them"

October 14, 2017 General News Information

There is a paradox in banking right now: Fees have never been higher, but it’s also easier than ever to sidestep them.

Banks continue to lean on fees to make money, as low interest rates and regulatory pressure have taken a bite out of profits.

The average cost of an out-of-network ATM withdrawal is $4.69, up 2.6 percent from a year earlier, according to the 2017 Bankrate checking account survey. Meanwhile, overdraft fees rose 1 percent to $33.38.

But if you tweak your habits, assess priorities and lean on technology, you can dodge these charges altogether.

“The fact is fees are continuing to go up, but they are avoidable,” says Greg McBride, CFA, Bankrate’s chief financial analyst. “Customers are not hostage to fees.”

Bankrate surveyed 10 banks and thrifts in each of 25 large U.S. markets from July 27 to Aug. 10, 2017. Here’s what we discovered.

Overdraft fees

Overdraft fees — what banks charge you when your purchases exceed the amount of money available in your account — set a record in 2017 after falling slightly last year. The average overdraft now costs $33.38.

If you overdraft your account one time, the first thing you should do is call your bank and ask them to give you a break, says Andrea Woroch, a personal finance expert who is working with Marcus, Goldman Sachs’ online lender.

“Sometimes we get into a pickle,” Woroch says. “Most banks will waive (an overdraft fee) once a year.”

To prevent further charges, experts say you should:

Set account alerts. Some banks offer daily updates, but given the amount of texts and emails we all receive daily, it is better to set up an alert for when a balance reaches a certain point, says Wendy De La Rosa, cofounder and principal of Common Cents Lab, which is part of The Center for Advanced Hindsight at Duke University.

Don’t set the baseline low, though, De La Rosa says. Sure, $75 might be enough to get you to payday, but that money could quickly evaporate with pending charges.

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