Learning to avoid the rising bank fees

As the banks have put it across, if the banks accept the proposal to bring down the debit card fees then – there would be a rise in the cost of checking accounts, there would be a fall in savings rates, and the rewards on debit cards will totally disappear.

Hence, it is very evident that the plans by the Fed to put a cap on the debit card fees is likely to result in increased costs for every other transaction that is carried out at your local bank or the credit union.

As per the financial reform legislation that was enacted last year, the Fed was directed to put some reasonable limits on fees that the retailers have to pay when the cardholders used their debit cards. Hence, sometime during December last year, the Fed decided to cap those fees at 12 cents which was down from the average of 44 cents. This fee cut was supposed to take effect from July, though some of the lawmakers in the Senate as well as the House have already introduced bills to delay the process.

Retailers claim that a cut in the debit card fees would lower the costs for consumers. But the banks and financial institutions claim that the proposed cap will not cover the cost of providing the debit cards. This would force them to increase the fees for the rest of their services.

Hence, some of the major banks have started eliminating free checking for those customers who don’t maintain sufficient minimum balances in their accounts. Some of the smaller banks as well as credit unions that have traditionally been offering low-cost services, now state that they will also have to hike up the fees if there is a reduction in debit card fees. At least 65% of the credit unions are now considering elimination of free checking in order to make up for the lost revenue from card swipes, according to the survey conducted by the NAFCU or National Association of Federal Credit Unions.

Here’s what you can do to avoid bank fees:

• Switch banks if you have to
• Try and consider a brokerage bank account
• Opt for online statements
• Ensure your credit card bills are paid on time
• Never use ATMs that are unfriendly

Follow all these simple tips and avoid paying extra by way of surcharges etc. there are many mobile apps which can help you save a lot by avoiding extra surcharge.