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5 ways to dodge new bank fees

by Jim Sloan

Federal regulators did many people a favor when it passed financial regulations affecting overdraft fees on your checking account and interest rates and penalties on your credit cards.

But all those regulations also cut into the bottom line for most banks and financial institutions, and they had to start looking around for new revenue streams. Now we're looking at checking account fees and restrictions on debit cards, for starters, and there are likely to be more fees coming out this summer.

What this means is that consumers are going to have to continue paying close attention to their checking account, savings accounts and other investments in order to avoid the news fees that banks will be rolling out.

5 steps to dodging fees and saving money

Here, then, are the top five things you can do to dodge those pesky bank fees:

  1. Move to Citibank. If you are repeatedly being charged overdraft fees because your bank clears your big checks first and then starts dinging you $29 each for those little $10 and $15 checks, consider moving your money to Citibank. Citibank just announced that its practice starting in July 2011 will be to process the smaller checks first. According to CNN, the median fee for overdrafts is $27 and overdraft charges are typically launched by transactions totaling just $17.
  2. Move to an online bank. While you may miss the brick and mortar of a traditional bank, online banks are still offering free checking and in some cases are refunding ATM fees other banks charge when you withdraw cash from one of their cash machines. Ally Bank offers interest checking and Charles Schwab Banks' high-yield investor checking account can be opened without an initial deposit. At State Farm Bank, all you have to do to get your ATM-fee refunds is to set up direct deposit.
  3. Carefully read your bank's disclosure statement. Chances are you'll be able to avoid a month checking account fee by maintaining a minimum monthly balance, which varies from bank to bank. Some banks will waive the checking account fee if you open a money market account or set up direct deposit for your paycheck or pension check. Here's where to find the best rates on money market accounts.
  4. Change your banking policies. Go back to keeping a meticulous check register and decline your bank's overdraft protection program. And while you're at it, avoid taking point-of-sale cash when you're shopping; you'll save the ATM fee, but you won't be warned if you're overdrawing your account.
  5. Get alerts. If your bank offers it, sign up for text or e-mail alerts that tell you when you're slipping into zero-balance territory. It's better to get a head's up than the head slap that you give yourself when you see an overdraft charge on your account. Ouch!

Those are the big ones. Of course, there are many other little things you can do to stop the leakage from your checking account or savings accounts, such as ordering the simple checks instead of the ones with the colorful artwork. Some banks offer a free box of checks every year, so be aware of when your freebie is due and try to make your checks last that long.

Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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