10 tips on avoiding bank fees
A positive relationship with money is extremely important in today's complex world of personal finance. In many respects, money is becoming more and more abstract at a time of direct debits and paperless billing.
And, with the latest changes to DIRT (deposit interest retention tax) included in Budget 2014, holding on to money is getting a lot more difficult for those proactively saving for a rainy day.
Dealing with and managing money, knowing the detail of how you spend and the detail of where things can cost you are core requirements to those that want minimal "loss".
This is easier said than done, but there is a strategy and a number of steps that consumers can take to become more effective.
Dealing with money in a positive way will pay off.
A good place to start for many citizens is by familiarising themselves with the web of fees that banks will level at the customer at some point or another.
Remember, it is still possible to avoid over-paying bank fees, it's just a matter of knowing where and how.
Q MAKE SURE MONTHLY REPAYMENTS REACH THEIR DESTINATION ON TIME
Let's take a credit card bill. When it arrives through the letterbox, make a note of the payment date.
Now, make sure whatever you do, you make sure that your payment is recorded by the due date, otherwise, you are likely to find that you will be hit with penalties or late fees (or both).
Paying on the due date may not result in your payment being recorded on time by lender you are making payment to.
And remember, late fees can really add up, so make sure you avoid them.
Q STOP PAYING BY CHEQUE
Successive governments have been steering us all towards a more paperless society, where more and more payments are electronic.
This makes for a more efficient payment system and easier system for the State to track who pays what. So, in order to nudge us all down the digital path, it is more expensive to pay by cheque than for forms of electronic payments.
Be aware of the charges that will apply to you from your bank and plan your payments accordingly.
Q KEEP SUFFICIENT BALANCES IN YOUR ACCOUNT
Most banks now require customers to keep substantial amounts of money with their bank account in order to avoid paying hefty monthly or quarterly fees.
So, it might be a good time to consolidate several smaller bank accounts (if you have them) into one main account where you wish to avoid fees.
Additionally, if you carry a small credit union account, it may be a good time to consider if you should transfer some of that to your main bank account to avoid rising banking fees.
Q FORGET LOYALTY AND BE PREPARED TO SWITCH
Keep an eye on competing offers from rival banks where better deals on fees and charges may still be available.
The loyalty of banks is only to themselves, their profitability and their shareholders.
The days of personal customer care are well and truly gone – so, put your own bottom line first and when you find a better deal on fees and charges, as well as the rate of return on a savings account, grab it and run with it.
Q AVOID UNNECESSARY QUERIES
Are you aware that banks charge customers for answering queries in relation to "non-routine service requiring significant time by branch staff"? These can cost a bundle per hour. There are even charges for data protection queries, so look out.
Q AVOID EXPENSIVE ATM WITHDRAWAL FEES WHEN ABROAD
These can really add up outside of the currency area so you may want to consider availing of pre-loaded foreign currency cards as a way of getting around them.
Q AVOID YOUR BANK ACCOUNT GOING INTO THE RED
Banks charge a bundle when accounts dip into the red and costs will continue to mount if your account remains there. This is one sure way to lose money.
Q KEEP GOOD RECORDS
Banks really know how to charge when it comes to providing duplicate copies of documents you already have, so try to avoid losing them, in the end, it will be your personal account that will take the hit.
Q DON'T LOSE YOUR PLASTIC
It is really expensive to get a replacement card (never mind the hassle of filling out all those forms) so be careful – you will get your replacement card but you'll lose out financially.
Q DON'T LOSE YOUR PIN
This can sometimes happen to those with even the best memories, especially following a new card being issued.
The point here is to ensure you log your PIN (personal identification number) in a safe place because if you don't, the bank will make a bee-line for your cash just to issue you with a new one.
LOYALTY DOES NOT PAY
The days of bank loyalty must be questioned considering today's radically changed financial landscape.
While banks have introduced a range of fees and charges to return them to profit, consumers have been slow to switch from one bank to another.
But loyalty no longer really pays as banks charge handsomely for convenience and service.
When you use banking services, that will cost you.
When you add on work for bank staff, that will cost you.
When you need additional questions answered, yes again, that will of course cost you.
And, while some banks have variously adjusted their pricing policies for different age groups, the trend is for more fees and charges, not less.
Knowing the detail of how you will incur charges and be charged for various services and conveniences at your bank is something that we will all need to become familiar with down to the granular detail if avoiding fees is to be perfected.
* Frank Conway is the founder of the Irish Financial Review.