Different ways to keep the costs down on checking and debit accounts

During the last year banks brought about a lot of changes to revamp the system where the monthly fee was hiked, there were tougher minimum balance requirements, and the rewards programs were snatched away. The only positive spin was that this was required to revamp the system and that customers would be given much more personalized options. However, this is no coincidence that it comes at a time when the whole industry is facing a sudden drop in revenue.

Last year there was a sweeping financial overhaul, when Congress had directed that the Federal Reserve sets a cap on the fees that banks could collect from retailers and merchants when consumers swipe the debit cards. However, banks claim that the current proposal by the Fed could cut down the $16 billion collection each year from these stores which would amount to 90%.

Banks are now scrambling to find ways and means to recover lost revenue but at the same time they cannot afford to alienate customers. So, by being a little vigilant, there can be ways and means to keep costs down and yet holding on to your terms.

Some of the things to watch out for:

• Withdrawals from ATMs – Withdrawing money or using the ATM of another bank could attract two fees that is one from your bank and the other from the ATM operator. Last year, the combined cost of using the out-of-network ATM was around $4 the previous year as per reports from Bankrate.com. But as per available information this figure is headed northwards. So, it is a good idea to avoid using the ATM of another bank as these institutions area looking at squeezing out money from accounts.
• Debit rewards – There are plenty of signs that reward programs on debit cards are on their way out. If you wish to hold on to the rewards just check if these rewards programs exist on premium accounts. Banks generally give customers perks when they bring them good business.
• Monthly fee – When banks advertise free checking accounts there are certain conditions that have to be met and monthly fees will only be waived off when the customer maintains the required minimum balance or sets up a direct deposit.
• Overdraft fees – This is something that you must avoid at all costs or you could end up racking your fees. If you don’t keep track of your violation, you could be charged for a succession of violations.