Stop Paying Unnecessary Fees in the New Year
Welcome to 2019. Now we are all better, more responsible people, and isn’t that great? We take control of our costs , excel in our hobbies, and set clearer boundaries with technology .
We also no longer depend on paying commissions for financial products (or at least we minimize the commissions we pay). Our 2019 version knows how paying commissions can undermine our finances in the long run , and given the lofty financial goals we have set for ourselves this year, this is simply unacceptable.
With that in mind, here’s how to avoid the most common fees in 2019.
Bank account commission
There is no reason for anyone to pay the bank to keep their money . If so, there are many options that will save you money while providing the same amount of service and support.
First, call your bank and ask if there is an account you can switch to that won’t charge you a monthly service fee. Your bank will ask you, “Are you sure? This means that you will no longer receive the 0.01 percent interest we are offering on [insert more expensive account name here]. ” And you say yes, because paying $ 25 a month to earn 0.01 percent on your balance doesn’t make sense. They will then change the name on your account and you are done and you will lose about five minutes of time.
If that doesn’t work, it’s time to move on to a new credit union or a different bank. You have some considerations here. Online banking may be better for you – there is often no minimum balance requirement and you can earn slightly more interest than at a national brick-and-mortar store. Credit unions can also offer you higher interest and better customer service .
The most important thing to remember is the footprint. If you visit a physical bank branch frequently, or like the fact that you can do it if you need to, then you can opt for a regional bank with a large physical area. Also, consider how often you use an ATM and whether there are ATM machines in the place where you live and work, in the institution you are moving to. Switching to a credit union just to pay your ATM fees multiple times a month doesn’t solve your fee problem.
After doing a little research to find the institution that best suits your financial reality, here’s how to do it:
- Open an account with a new institution : You need to leave some money in your old account to cover any accounts that arise, but open a new account and transfer funds as per any minimum requirements (ideally there won’t be, but you Never Know).
- Transfer your accounts to a new account : Review your bank statements and switch account payments to the new account. You want to get the timing right so that you have enough funds to cover your bills and do not incur any inadequate fees or late fees on your bills. Make sure that any checks you have written (for example, for rent) are removed from your old account. Switching accounts can take several weeks depending on the situation, so be patient and make sure you have enough money in your old account to cover any surprises.
- Ask your old bank to confirm closure : After you have moved your money, visit your old bank (ideally in person) and ask for confirmation that your account is closed, especially if you are moving to avoid monthly maintenance fees.
Bank overdraft fee
Bank overdraft fees can be as high as $ 40 depending on the institution. The easiest way to avoid this is to check your balance daily and link your savings account to your checking account. You can still incur overdraft fees here (Chase and US Bank are among the big banks that don’t charge fees for linking to a savings account with a bank), but it will be well under $ 40.
If you are worried about overdraft, please disable overdraft protection for your account. Purchases with your debit card will be declined, but you will not be charged any fees. And sign up to receive text alerts on your banks’ balance if they offer one.
Bank Transfer Fee
During the wire transfer process, you may notice that banks charge fees for transferring money to each other, on average around $ 25, according to NerdWallet . This is not great.
If you are sending money to other people in the US, there are ways to bypass the fees. Use a service like Venmo or Zelle (note: banks using Zelle may add a commission). This adds friction, but you save money.
Even on what should be remembered that according to NerdWallet, this is the case, when a call to the bank may increase the commission . The best way to transfer funds is online. “Requesting a transfer at a branch or by phone can add $ 10 or more to your commission,” writes NW. “Chase, for example, charges $ 35 for internal bank transfers arranged for you by a banker, and $ 25 for the same transfer if you do it yourself over the Internet.”
Credit Card Annual Fee
The easiest way to avoid this fee is, of course, not to have an annual credit card. But given the other benefits of these cards (for example, many, though not all , top travel reward cards come with an additional cost), you don’t need to avoid them entirely .
So, calculate whether the benefits offset the costs. According to CreditCards.com , half of the annual fee cards will opt out within the first year, so this is a gift. After that, look at how you use and see if the rewards compensate for the commission.
And try calling your issuer and asking them to waive the commission. According to a survey by CreditCards.com, 70 percent of people who asked to waive a fee were completely successful or had it reduced. Your issuer might want to do this, especially if you’ve held the card for a long time and have a good track record. You never know until you call and ask.
Credit Card Balance Transfer Fee
Typical fees for transferring credit card balances are three to five percent, according to Credit Karma . But the sense of translation of balances is to save money on interest and pay off the debt, not to spend more, and there are plenty of cards that do not charge a commission and offer an initial rate of 0 per cent for a period of time.
NerdWallet has several suggestions for the best free cards . Don’t be afraid to turn to credit unions, which may have great options – just take the membership requirements into account first.
If you are not eligible for one of the free cards, you can also negotiate according to Bankrate . The key is to do some preliminary research online and then call the issuer and see if they can offer you something better over the phone.
“Don’t get too excited about any suggestions. Ask if they have anything better. The supervisor can actually offer you a better deal, ”writes Bankrate. “And there is one more thing to keep in mind: a 0 percent proposal could be introduced next week. Make sure you know when there may be new transfer offers. “
Overseas credit card transaction fees
If you travel frequently, you probably already have a card with no foreign transaction fees. If not, it’s easy to find. Capital One and Discover do not charge these fees on any of their cards, and virtually any card issuer will offer a card without them. If you are going to travel, it might be worth applying for one of these emergency cards.
Credit Card Late Fee
This is one of the simplest fees to avoid on the list. Turn on automatic bill payment and you don’t have to worry about paying commission. Just in case, include the date of your credit card payment as a calendar reminder and check the day to day to make sure the payment was paid.
If you are late, call your issuer and ask if they can opt out. It will work the sooner you do it and if you already have a good track record of getting paid on time.
Fee for early disconnection of cell phones / cable
If you terminate your contract with your cellular carrier or cable / internet company, you will most likely be charged an early termination fee. There is not much leeway here, as the company has no reason to refuse to pay for you. However, you can ask your new provider to pay this fee. Many companies offer to cover the commission in order to attract new customers.
Cable / Internet installation fees
If your home is already wired, you can most likely configure your new internet modem yourself. Or use the old standby mode: ask the company to drop the board. And if you rent a modem or other equipment from your ISP, it probably makes sense to buy your own. You will pay more in advance, but in the long run, you will come out ahead.
IRA Account Maintenance Fee
Brokerage firms may charge you a monthly fee to service your IRA, especially if your balance is below a certain threshold (say, $ 10,000). But, as with banks, there are many firms that do not charge this fee, including Charles Schwab , Fidelity, and TD Ameritrade . Others may opt-out if you meet certain requirements, such as when you sign up to receive electronic reports. If you’re just starting out or have a low balance, check out these providers, which also offer great investment options to save money.
Nobody is perfect – we will all spend money we didn’t need. But that doesn’t mean you can’t minimize the frequency of this. Set up your balance alerts, remember to include bill payment dates on your calendar, and automate what you can. A quick phone call can save tens or hundreds of dollars. Always read the fine print and remember that in today’s financial ecosystem, there is bound to be someone who can offer you a quality product for free or for less than your current supplier. There is simply no reason to pay excessive fees.