Welcome to 2019. We’re all better, more responsible people now, and doesn’t that feel great? We’re getting our spending under control, excelling at our hobbies and setting up better boundaries with technology.
We’re also not getting suckered in to paying fees on financial products anymore (or at least, we’re minimizing the fees we pay). The 2019 version of us knows how paying fees can derail our finances in the long term, and considering the lofty money goals we set for ourselves this year, that just won’t be tolerated.
With that in mind, here’s how to avoid the most common fees in 2019.
There’s no reason for anyone to pay a bank to hold their money. If you are, there are plenty of options out there that will save you money while providing the same amount of service and support.
First, call your bank and ask if there’s an account you can be switched into that won’t charge you monthly maintenance fees. Your bank will ask you, “Are you sure? That means you will no longer earn the 0.01 percent interest we offer on [insert more expensive account name here].” And you will say yes, because paying $25 per month to earn 0.01 percent interest on your balance makes no sense. Then they’ll switch the name on your account and you will be all set, and you will have lost around five minutes’ time.
If that doesn’t work, then it’s time to switch to a new credit union or another bank. Here you have some considerations. An online bank might be better for you—often there aren’t minimum balance requirements, and you can earn slightly more interest than you would at a national brick and mortar. Credit unions also might offer you better interest and customer service.
The biggest thing to keep in mind is footprint. If you often go into a physical bank branch, or like the fact that you can if you needed to, then you might want to stick to a regional bank with a large physical footprint. Also, consider how often you use an ATM and whether or not the institution you’re switching to has ATMs in the areas you live and work. Switching to a credit union only to pay ATM fees multiple times a month isn’t solving your fee problem.
Once you’ve done some research to find the institution that best fits your financial reality, here’s how to make the switch:
Bank overdraft fees can cost as much as $40, depending on the institution. The easiest way to avoid this is to check your balances daily, and link a savings account to your checking account. You still might incur a fee here if you overdraft (Chase and U.S. Bank are among the big banks who don’t charge a fee for linking to a savings account with the bank), but it will be significantly less than $40.
If you’re worried about overdrafting, turn off your account’s overdraft protection. Your debit card purchases will be rejected, but you won’t incur a fee. And sign up for your banks balance text alerts, if they offer them.
In the midst of your bank transfer, you might notice that banks impose a fee to transfer money to each other, averaging around $25, according to NerdWallet. That’s not great.
If you’re sending money to other people in the U.S., there are ways to get around the fees. Use a service like Venmo or Zelle (note: banks using Zelle may choose to add a fee). It adds friction, but you’ll save money.
Something else to keep in mind: This is one case where calling the bank might add to the fee, according to NerdWallet. The best way to transfer funds is often online. “Requesting the transfer at a branch or on the phone can add $10 or more to your fee,” writes NW. “Chase, for instance, charges $35 for domestic wire transfers set up for you by a banker and $25 for the same transfer if you do it yourself online.”
The easiest way to avoid this fee is, of course, not to have a credit card with an annual fee. But given the other benefits of these cards (many, though not all, of the best travel rewards cards, for example, have a fee attached), you don’t necessarily want to avoid them altogether.
So, do the math on whether the benefits make up for the cost. Half of cards with an annual fee will waive it for the first year, according to CreditCards.com, so that’s a gimme. After that, look at your usage and see if the rewards made up for the fee.
And try calling your issuer and asking them to waive the fee. According to a poll from CreditCards.com, 70 percent of people who asked for the fee to be waived were completely successful, or had it lowered. Especially if you’ve been a long-time card holder and have a good payment track record, your issuer may be willing to do so. You never know until you call and ask.
The typical fee to transfer credit card balances is around three to five percent, according to Credit Karma. But the point of transferring balances is to save money on interest and pay down debt, not spend more, and there are plenty of cards that don’t charge a fee and offer an introductory 0 percent APR for a period of time.
NerdWallet has some suggestions on the best no-fee cards. Don’t be afraid to look to credit unions which can have some great options—just take the membership requirements into consideration first.
If you don’t qualify for one of the no-fee cards, you might also be able to negotiate, according to Bankrate. The key is to do preliminary research online, but then call the issuer and see if they can offer you something better over the phone.
“Don’t sound too enthused about any offer. Ask if they have anything better. A supervisor may indeed be able to offer you a better deal,” writes Bankrate. “And there’s another thing to keep in mind: Next week, a 0 percent offer may be introduced. Make sure you find out when new transfer offers might be available.”
If you travel often, you probably already have a card without foreign transaction fees. If you don’t, it’s easy to find one. Capital One and Discover don’t have these fees on any of their cards, and pretty much any issuer will offer a card without them. If you have a trip coming up, it might be worth applying for one of these cards to have in case of emergencies.
This is one of the simplest fees to avoid on the list. Put your bill on auto-pay, and you won’t have to worry about paying a fee. To be safe, but your credit card payment date as a reminder in your calendar, and check in day-of to make sure it’s been paid.
If you are late, call your issuer and ask if they can waive it. This works the sooner you do it, and if you have a good track record of paying on time already.
If you break a contract with your cell phone carrier or cable/internet company, chances are you’ll be charged an early termination fee. There’s not a ton of leeway here, as the company has no reason to waive the fee for you. But you can ask your new provider to cover the fee. Many companies offer to cover the fees as a way to entice new customers.
If your home is already wired, then chances are you can set up your new internet modem yourself. Or, use the old standby: Ask the company to waive the fee. And if you’re renting a modem or some other equipment from your provider, it probably makes more sense to buy your own. You’ll pay more upfront, but you’ll come out ahead in the long run.
Brokerage firms may charge you a monthly maintenance fee for your IRA, particularly if you have a balance below a certain threshold (say, $10,000). But, like banks, there are plenty of firms that don’t charge this fee, including Charles Schwab, Fidelity and TD Ameritrade. Others may waive it if you meet certain requirements, such as signing up for e-statements. If you’re just starting out or have a lower balance, look to these providers—which also offer great investing options—to save some money.
No one’s perfect—all of us will spend some money we didn’t need to. But that doesn’t mean you can’t try to minimize how often you do. Set up balance alerts, remember to put bill payment due dates in your calendar and automate what you can. A quick phone call can save you tens or hundreds of dollars. Always read the fine print, and remember in today’s financial ecosystem, there’s bound to be someone who can offer you a quality product for free, or for less money than your current provider. There’s just no reason to pay excessive fees.