Tag: Banking


The History of Overdraft Fees

Overdraft fees are a wolf in sheep’s clothing. While a bank often markets overdraft protection as a way to help you out when you make an occasional budgeting error, it’s really just an expensive form of credit.

Think about it: in 2014, the Consumer Financial Protection Bureau (CFPB) found that the majority of overdraft fees were charged on transactions of $24 or less. With a median fee of $34 at the time, the same type of charge on a loan for a similar three day period would result in an annual percentage rate (APR) of 17,000%.

How did we get to this point? And what can you do about overdraft fees? Read on to learn more.

A short history of overdraft protection

An overdraft occurs when you’ve written a check, taken a cash withdrawal or used your debit card in an amount that exceeds your available funds. Most banks and credit unions offer overdraft protection, and this covers your shortfall in exchange for a fee.

The first overdraft authorization happened in 1728, according to the Royal Bank of Scotland. An Edinburgh-based merchant named William Hog received permission from his bank to temporarily withdraw more money from his account than he had available. This cash credit, as it was termed, was the forerunner of the modern overdraft. At one point, 18th-century philosopher David Hume called the cash credit idea “one of the most ingenious ideas that has been executed in commerce.”

But, let’s now think about this in terms of modern times. In 2017 alone, consumers paid $34.3 billion in overdraft fees, according to PYMTS.com. So, it’s possible that if Hume knew what would become of the cash credit idea, he may have changed his tune.

The modern overdraft

It’s unclear exactly when banks started charging overdraft fees. But according to Moebs Services, a research firm that focuses on financial institutions, these fees have steadily increased over time.

In 2000, for instance, the median overdraft fee was $20 among banks and $15 at credit unions. In 2017, those fees increased to $30 and $29, respectively. That said, some of the biggest banks in the U.S. charge between $34 and $36. While there are still some institutions that don’t charge fees on overdrafts of less than five dollars, this is not a universal feature. Also, some institutions charge extended overdraft protection, which adds more fees if you don’t bring your balance back to zero within a certain period. These time periods can range from one day to a week.

What you can do to avoid overdraft fees

While overdraft fees are ubiquitous, it’s possible that you’ll never have to deal with them. For starters, you can budget your money in a way that you never overdraw your account. And, if you make a mistake, you can also get your account back in the black before the end of the business day.

There are also three things you can do to boost your chances of never paying an overdraft fee. Take a look:

1. Opt out of overdraft protection

In 2009, the Federal Reserve Board announced a new rule prohibiting financial institutions from charging overdraft fees on ATM and one-time debit card transactions unless the customer opts in for overdraft protection on these transactions. The rule, which was made under Regulation E, went into effect in July 2010.

Yet, according to a 2017 study by The Pew Charitable Trusts, nearly three-quarters of people who overdraft don’t know they have the right to opt out. Guess what? You can opt out! By doing so, any transaction that overdraws your account will simply be declined.

This may not be ideal in some situations. For example, a credit card company may charge you a returned payment fee if a payment doesn’t go through due to an insufficient balance. For other transaction types, however, the only negative impact from a declined payment may be an embarrassment.

2. Get an account with a bank that offers alternatives

Rather than charging a flat fee every time you overdraw your account, some banks offer less punitive forms of overdraft protection. For example, some banks set up automatic withdrawals from a savings account to cover overdrafts.

Let’s say you overdraw your account on a Monday morning and your account is still negative at midnight. Instead of charging you an overdraft fee, the bank will transfer cash from your savings account to cover the negative amount.

Another option is an overdraft line of credit. Again, instead of charging you a flat fee, the bank charges you interest — say 18% — on the negative balance. While this might seem high, if you overdraw $24 and bring your account back to positive within a few days, the accrued interest amounts to pennies.

3. Get an account with a bank that doesn’t charge overdraft fees at all

With the rise of challenger banks, many new institutions have addressed some of the major issues with the traditional banking system, including the problem of overdraft fees.

If you open an account with Chime, for example, you’ll never pay overdraft fees. Period. This means you don’t have to find some other way to avoid the problem because there’s no problem to begin with.

The bottom line

Overdrafts have been around for a long time, but the penalties keep getting worse. The good news is that there are plenty of ways to avoid overdraft fees, and some financial institutions don’t charge them at all.

If you’ve paid an overdraft fee recently, it may be a good time to look into alternatives at your bank or switch banks altogether.


A Guide to ChexSystems

Imagine going to a new bank and waiting in line to open an account. You chat with the friendly bank teller, giving him the information he needs to open an account, along with your ID.

Maybe you’ve had a few overdraft charges in your past, but who hasn’t? Besides, your act is together now, and when you need a late-night pizza, you know you have the money in the bank for it. After a few minutes, his face turns grim. “I’m sorry,” he says. “At this time, we can’t offer you a bank account with us.”

What gives? If you haven’t experienced this embarrassing event yourself, count yourself lucky. It happens every day, and it might just happen to you someday too. It may have to do with one consumer reporting agency: ChexSystems.

Read on to learn more about ChexSystems and what you can do if you want to open a bank account with no ChexSystems. 

What is ChexSystems, anyway?

ChexSystems is a consumer reporting agency (CRA), and it operates like the credit agencies Equifax, Experian, and TransUnion. Except, in this case, ChexSystems collects data about how you’ve used your past bank accounts, rather than how you’ve paid off your debts. Another key difference between ChexSystems and the debt-related CRAs is that ChexSystems generally only lists negative information on your report. So, even if you’ve only had one overdraft charge, it’s possible that it’s the only thing listed on your ChexSystems report (even if you are an otherwise perfect banking customer.)

There are a few other agencies that do the same job as ChexSystems, but according to the National Consumer Law Center, ChexSystems is one of the most widely-used CRAs. In fact, over 80% of financial institutions use CRAs like ChexSystems and its rival, Early Warning Services, to determine whether to grant someone a bank account. Information on your ChexSystems report stays there for a full five years. This means that your mistakes from yesteryear can still impact you today.

Why ChexSystems is Unfair

The reason banks use CRAs like ChexSystems is to make sure you’re not going to open a fraudulent account or rack up a bunch of unpaid bank fees. It makes sense, right?

In reality, however, using ChexSystems is an unfair business practice that can harm consumers like you, according to the National Consumer Law Center. Currently, 17 million Americans — about five percent of the entire U.S. population — don’t have a bank account. And, out of those in this group who have had bank accounts in the past, about 15.5% of them can’t get a bank account now, likely due to a negative CRA report.

Lest you think this is a problem just for poverty-stricken people, think again. On average, about 25% of banks will automatically deny you right off the bat if you have any negative information on your account at all, even if you’re a millionaire. A further 50% of banks will need to call in a branch manager to make a decision on your case (how embarrassing).

Couple this with the fact that many big banks have unfair or unclear overdraft policies, making it even harder to avoid negative marks on your ChexSystems report.

What are my rights for dealing with my ChexSystems report?

Luckily, ChexSystems is governed by the Fair Credit Reporting Act just like TransUnion and the other CRAs. This means that when it comes to how your information is reported and used, you do have rights.

You can get a free copy of your ChexSystems report once per year, just like with your credit report. It’s a good idea to check your report periodically to make sure there’s no fraud or errors listed on it, especially if you plan to open a new account.

If you do apply for a bank account and are denied based on what the bank saw in your ChexSystems report, you can also get another copy for free to make sure it’s accurate. Sadly, even if you’ve paid all of your bank charges, negative information still stays on your report – if it was actually your fault. Yet, if you spot an error, you can resolve it by contacting your bank and ChexSystems to file a dispute. The bank and ChexSystems have to investigate your dispute, but — surprise — it doesn’t always go in your favor, even if you’re in the right. If you think both of them made a mistake and they’re not clearing it up to your satisfaction, you can also file a report with the Consumer Financial Protection Bureau and the Federal Trade Commission.

What if I’m still denied a bank account based on my ChexSystems report?

If you’ve checked your report and it accurately reports negative information, we hate to be the bearer of bad news. Many banks won’t offer you a bank account.

However, you’re not out of options just yet. There are many bank accounts — like Chime Bank — that don’t use the ChexSystems reports. If you open a bank account with Chime Bank, you won’t even be charged pesky overdraft fees, which may have led to the negative information in in the first place.

Having a negative ChexSystems report is certainly an inconvenience, but it’s not the end of the world. Chime has your back, even if no other banks do.


What Do You Need to Open a Bank Account?

If you’re ready to open a bank account or switch banks, there’s probably a big question looming over your head: “What do you need to open a bank account?” After all, opening a bank account is a process and you want to prepare and have things ready. Right?

So, here’s the lowdown on what you need to open a bank account.

Know what kind of bank account you want

First things first. You want to know what kind of bank account you want. Do you want a checking account to pay your bills? Or are you looking for a savings account to pocket your coins?

Perhaps you want both a checking and savings account to help you manage your finances. Here are some things to consider when searching for a specific type of bank account:

  • Look for online bank accounts with no fees
  • Look for free checking account banks (with no monthly minimums!)
  • See which banks offer a free checking account without an opening deposit
  • Find options where you can open a checking account online instantly

All of these things can make it easier to find the right bank for you.

What kind of bank do you want to work with?

Secondly, you’ll want to figure out what bank you actually want to do business with. A bank is a financial institution responsible for housing your money. You want to make sure your values align with your bank and that you’re not getting nickeled and dimed for everything.

Do your research and search for free checking account banks that don’t hit you with monthly fees or unnecessary charges. A good option can be an online bank account, like Chime, where there are no fees and you can open a checking account online instantly.

Before deciding on a bank, make sure to read the fine print and understand any fees, as well as the terms and conditions. This way you’ll avoid any surprises later on.

What do you need to open a bank account?

After you’ve figured out what type of bank account you want and chosen the bank you want to work with, it’s time to actually open an account!

But what do you need to open a bank account? And if you’re applying in-person, you might wonder what to bring to open a bank account. While many banks have different requirements, they often need the same information. All banks, for example, require that you are at least 18 years old.

Take a look at what to bring to open a bank account:

1. Government-issued I.D.

In order to open a bank account or online bank account, you’ll likely need a government-issued I.D. like a passport or driver’s license.

2. Social security card

You will need a social security number to open a bank account, so bring your social security card with you or have it handy if you’re applying for an online bank account.

3. Utility bill, lease, or billing statement

Now that you know you’ll need an I.D. to open a bank account, you may wonder, “Do I need proof of address to open a bank account?” This may be an important question if you’re in the middle of moving or don’t have a full-time residence. The answer is yes. You will need to have a utility bill, lease or billing statement on hand to have proof of address to open a bank account.

How to open a bank account online

If you want to open a checking account online instantly, you will want to apply for an online bank account and download their mobile app. If you’re wondering how to open a bank account online, it’s pretty simple and can be done from the comfort of your own home!

Simply go to the site or app of the online bank account, fill out the application, and then provide your personal information and verification. Once you apply for a traditional bank account or an online bank account, you’ll want to deposit money to fund your account.

If you’re worried about how much money you need to open a bank account, consider an online bank account like Chime that has no fees and no requirements for minimum balances.

Bottom line

If you’re ready to open a bank account at a traditional bank or apply for an online bank account, you’ll want to know what to bring to open a bank account. Using this guide, you can be prepared and open a bank account today.


College Grads: What to Watch out for When Choosing Your First Adult Bank Account

Shortly after graduating college, reality sets in: you’re a real adult now. It can be overwhelming, but it’s time to deal with your financial life and this includes taxes, student loan debt, and mortgage or rent payments. It’s also time to get down to business when it comes to saving money.

First things first: you’ve got find a bank that is free and will help you manage your money efficiently. If you had a student checking account at your college bank, it’s time to get rid of that and instead open a bank account that suits your new adulting lifestyle.

Luckily, opening your first adult bank account isn’t as difficult as it seems. Here are 5 tips to help you get you started.

Consider Accessibility and Convenience

If a brick-and-mortar bank is important to you, make sure that a branch is easily accessible should you need to make deposits, withdrawals or talk to a teller. This doesn’t mean your bank has to be on every street corner in your neighborhood. But, you also don’t want to travel far if you have an issue with your account and need to speak to a representative.

With this in mind, make sure your bank is open during the hours you can get there. For example, if you have mostly evenings available during the week, you may want to consider a bank that can accommodate those hours.

Another tip: you may want to consider an online bank account, especially if you never go into a branch and prefer to deal with banking issues online or on the phone. With an online bank, you’ll have 24/7 access to your account. You can also manage your account from home or on the go on your mobile device.

Check the Fees

Banks fees are one of the most important factors to keep in mind when choosing where to open your first adult bank account.

For starters, miscellaneous fees can eat up your account balance fast. In fact, the average U.S. household pays more than $329 in bank fees every year! Some of the most common bank fees include:

  • Monthly maintenance fees
  • Minimum account balance fees – charged if your daily account balance falls below a certain threshold
  • Overdraft fees. These can run you up to $35 per overdraft incident
  • ATM fees. These are charged when you use an out-of-network ATM
  • Refunded deposit fee – charged for a bounced deposit check
  • Paper statement fee
  • Lost debit card fee
  • Foreign transaction fee

The good news is that most of these fees can be avoided depending on which bank and account you choose. For example, Chime makes banking faster and has no fees, ever. That’s right. No overdraft fees, minimum balance requirements, monthly service account fees, ACH bank transfer fees, card replacement fees, or foreign transaction fees. In addition, Chime members have access to more than 30,000 fee-free MoneyPass ATMs located all over the U.S.

Read the Fine Print

Before you open a bank account, be sure to read the fine print in order to fully understand the terms and details.

For instance, it’s important to read about any applicable fees associated with your account, as well as other terms and conditions. In addition, make sure you understand the bank’s privacy policy and familiarize yourself with features you can take advantage of as an account holder.

Consider the Saving Account Benefits

While you may be mainly focused on opening a checking account, it’s a wise idea to open a savings account as well.

Pro tip: it helps to keep your spending money separate from your savings. As part of your savings plan, you may want to start a fund to cover emergencies and unexpected expenses. Plus, you can begin saving up for big purchases in advance. This will help you steer clear of racking up credit card debt.

When it comes to choosing the best savings account, you may want to consider a bank that will provide an interest-bearing account and automatic transfer options. And, just like with a checking account, you’ll want to examine the fees and read the fine print. One major rule set by the Federal Reserve is that banks cannot allow you to withdraw money from your savings account more than six times per month. Some banks may even have an excessive withdrawal fee, so make sure to check on this.

Comparison Shop and Choose Wisely

Post-graduate life is full of changes and new beginnings. And, your first bank account after college marks a new start on your adult financial life. By following the advice above and comparison shopping, you’ll be one step closer to finding the best bank for you.


Spending More on Overdraft Fees? You’re Not the Only One

It’s no secret that big banks are getting richer off the backs of everyday people. What’s different now is that we know just how much richer.

According to a new report from the economics research firm Moebs Services, banks made a record-setting $34.3 billion in 2017 alone. That’s more than $100 per year for every last man, woman, and child in the United States. It seems especially unfair since 75% of the people paying these fees already have problems paying their monthly bills, according to a Pew Charitable Trusts study.

About now you may be wondering how you can avoid troublesome overdraft fees. Read on to learn about these fees and how to pocket more of your hard-earned cash.

Overdraft Fee Rules Have Been Changing

Remember the 2008 financial crisis? One of the byproducts of that chaos was that banks needed to start asking for your permission to enroll you in overdraft protection services. They instead billed you for this service – in the way of fees.

Asking for your permission first was supposed to make the banking process more transparent. But, banks found sneaky ways to get around it, such as by not fully explaining your options and getting you to sign on the dotted line while you filled out a barrage of paperwork necessary to open your bank account (do you remember consenting?).

Overdraft Fees Have Been Increasing

Overdraft fees are on the rise. Back in 2000 when the Backstreet Boys were still a thing, big banks charged a median overdraft fee of $18, according to Moebs Services. If that price kept pace with inflation, today’s price should be $25. Instead, it’s $30, meaning that banks are charging more than their fair share.

Even credit unions—which are usually lauded as being more consumer-friendly—are charging increased overdraft fees. Again, back in the year 2000, most credit unions were charging a median overdraft fee of just $15, three dollars less than banks. If credit unions kept pace with inflation they should be charging $20.86 per overdraft, but instead, they are charging a median fee of $29—almost double what they were charging 18 years ago.

One glimmer of hope is that the economists from Moebs Services believe that the rise in overdraft fees has currently peaked at around $30. Of course, only time will tell.

How to Avoid Overdraft Fees

Even though overdraft fees can be a hairy trap when you’re least able to deal with these sneaky charges, there’s good news: overdraft fees are entirely avoidable. You just need to be prepared. Here are some options to steer clear of these fees altogether:

Look for a Bank That Doesn’t Charge Overdraft Fees

Believe it or not, it is possible to find a bank that doesn’t charge any overdraft fees. Because these fees add up, it can be well worth your time to switch to a fee-free bank. In addition, Chime Bank also processes your direct deposit paycheck two days earlier than most banks, which can be especially helpful during those tricky times when you’re still living paycheck-to-paycheck and most likely to incur overdraft fees.

Opt Out of Overdraft Coverage

Did you know that you can actually opt out of overdraft coverage at any time? If you didn’t know this, you’re not alone: 70% of banking customers weren’t aware of this either, according to a Pew Charitable Trusts study. This means that any purchases you make that will overdraw your account will be declined. You won’t be charged for that purchase and you won’t be slapped with an overdraft fee.

Yet beware, this still isn’t a foolproof, fee-free option. If you pay for something with insufficient funds in your account, you may have to pay a non-sufficient fund (NSF) fee. Luckily, debit card transactions and ATM withdrawals aren’t subject to this tricky fee; those purchases will just be declined outright with no NSF fee.

On the other hand, if you write a check and don’t have sufficient funds to cover that transaction, banks can charge you an NSF. You can also get dinged for making a recurring electronic payment that results in a negative balance.

Keep a Close Eye on Your Budget and Checking Account

One of the most common ways people end up with overdraft fees is when they write checks and forget to reconcile their spending with their budget. Either that or they forget to check on their checking account balance altogether.

To avoid falling into this trap, it’s a good idea to both keep tabs on your checking account and update your budget every few days.

Always Carry Extra Cash or a Credit Card in Your Wallet

If you’re out and about, try to carry extra cash or a credit card for emergencies. By using your credit card, for example, you can pay off the charges in full so that you won’t owe any interest charges. At least this way you won’t be staring at overdraft or NSF fees if you inadvertently pay for something without enough funds in your bank account.

Hold Onto Your Money

Just remember, where there’s a will, there’s a way. Even though Americans are paying more in overdraft fees than any time since 2009, this doesn’t mean that you need to fall prey to these charges. You can instead follow these tips to avoid overdraft fees. You can also switch to bank that will never charge you fees. After all, it’s your money and you deserve to keep it.



When Will Cash Become Obsolete?

Cash is still king in the United States, according to the latest data from the Federal Reserve. Nonetheless, cash is losing ground to plastic and electronic payment methods.

Based on the Federal Reserve report, cash made up 31% of all transactions in terms of volume in 2016. That number is down from 40% in 2012, according to a previous report. With the rise of cryptocurrencies as another digital cash alternative, you may be wondering if and when cash will no longer be part of our everyday lives. And, if you’re scratching your head thinking cash will  never go away, here’s another fact: some countries have already started moving toward a cashless economy.

To stay on top of current trends and find out if cash is truly going by the wayside, read on to learn about changing payment methods in the U.S and around the world.

To be or not to be cashless

It’s hard to say for sure, but at this point, it’s hard to believe that cash will become universally obsolete. To illustrate, let’s consider a tale of two countries: India and Sweden. In India’s case, cashless likely isn’t the best bet, while in Sweden, cash may soon become a thing of the past.

India’s cashless woes

In 2016, India’s prime minister Narendra Modi announced that the country’s two most common banknotes — which, by value, accounted for 86% of the currency in circulation — would be banned.

But a year later, the demonetization made waves in the Indian economy, and the Centre for Monitoring Indian Economy estimated that 1.5 million jobs were lost in the first four months of 2017 because of the ban. According to a Bloomberg report, small and medium businesses in the country – which depend largely on cash transactions – took the brunt of the impact.

With about a year and a half of data to work with, it’s impossible to say if these consequences are an indication that cash is essential to India’s economy. But, as people have lost their jobs or businesses, this remains a cautionary tale to other countries that are considering going the same cashless route.

Sweden and the race to become the first cashless country

Sweden was the first European country to introduce modern-style banknotes in the 17th century, so it’s fitting that the Scandinavian nation may become the first country in the world to go completely cashless.

Like India, the country banned consumers from making payments with two of its popular banknotes. However, it continues to allow people to deposit cash into their bank accounts until the end of June 2018.

According to a report by Sweden’s central bank, Sveriges Riksbank, the ban is working. The proportion of cash payments in the retail sector fell from 40% in 2010 to 15% in 2016. What’s more, two-thirds of Swedish consumers say they can manage without cash. The report also states that more than half of the country’s bank branches no longer conduct cash transactions. Another report estimates that the country will become fully cashless by 2030.

In the U.S., Millennials aren’t ditching cash anytime soon

While you may think older generations are more likely to use cash than Millennials, you may want to think again. According to the Federal Reserve, Millennials and Generation Zers are actually more likely to use cash than Baby Boomers and Gen Xers.

It’s hard to say for sure why Millennials and Generation Zers prefer cash more than older consumers, but we have a few guesses. Take a look:

They don’t have easy access to credit cards

The Credit CARD Act of 2009 made it more difficult for college students to get credit cards. For example, credit card issuers are no longer allowed to advertise on college campuses, and they’re required to consider your ability to repay the debts you incur before approving your application.

Subsequently, many college students have a hard time getting approved, even for student-focused credit cards. This is because they either have no previous credit history or they don’t have sufficient income.

They want to avoid debt

Millennials grew up during the Great Recession when consumer debt hit an all-time high. As a result, they understand the consequences of living beyond your means, both on a macro and personal level.

What’s more: the student loan debt crisis has made it difficult for many to justify adding more debt. According to data from Student Loan Hero, college graduates are leaving school with $37,712 in student loans. As a result, even Millennials who may qualify for a credit card often choose debit cards or cash to avoid overspending.

They’re concerned about data breaches

Thirty percent of the data breaches that happened in 2017 included compromised credit cards, according to Javelin Strategy and Research. In addition, the Identity Theft Resource Center has already seen 21 finance-related breaches in 2018, making it difficult for young consumers to trust the system. Instead, they choose to stick with what they can hold in their hands: cash.

The future of cash is still secure

While Americans may be using less cash than they did five years ago, it’s hard to imagine cash going away anytime soon in the U.S.

And while cash still reigns king in America, you might as well save as much of it as much as you can while putting your plastic to work for you. To do this, enroll in Chime’s Automatic Savings program. This way, every time you use your Chime debit card, Chime will round up the transaction to the nearest dollar and transfer the round-up amount into your savings account. By taking advantage of Chime’s automating features, you can also start paying yourself first as you work toward achieving your financial goals.


What is a Monthly Maintenance Fee, and How Do I Avoid Them?

What if you asked a friend to watch over your precious jewels and she said, “Yeah, no problem.” But later on, she hit you up for a monthly fee for babysitting your jewelry. How would you feel, especially as she didn’t tell you upfront about this so-called fee? Probably a little peeved, right?

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Unfortunately, this kind of scenario happens all the time in the form of monthly maintenance fees at numerous banks. It’s true. Many financial institutions charge a monthly maintenance fee if you don’t meet certain requirements. As a consumer, it’s important for you to be aware that your bank account may be charging you fees. Along these lines, you should know how to avoid paying them.

What is a monthly maintenance fee?

A monthly maintenance fee is a fee charged by a financial institution to a customer if certain requirements aren’t met. For example, some banks may charge a monthly maintenance fee if your account balance is under a certain threshold.

These fees are charged by banks to help “maintain” your account, kind of like a service fee. Banks thrive off of managing your money and if you carry a high balance in your account, you may get hit with a fee.

How do I avoid monthly maintenance fees?

Paying a monthly maintenance fee can be annoying. What’s worse: you may not even realize you’re getting charged. I remember a friend of mine telling me she was scrolling through her Bank of America account and noticed she was being charged a fee.

Just how much was she paying? The Bank of America monthly maintenance fee was $12 per month. In order to avoid the fee, she had to have a certain balance or sign up for direct deposit. The issue? She didn’t have a steady job at the time and her income was irregular.

My advice to her was to break-up with the big bank and open a bank account that had a free checking account and no fees.

A snapshot look at monthly maintenance fees at big banks

Not all banks charge a monthly maintenance fee. For example, many online banks and credit unions do not charge any fees. However, many large financial institutions do charge monthly fees and these charges vary from bank to bank.

Here’s a closer look at the monthly maintenance fees at big banks and how you can avoid them.

Bank of America monthly maintenance fee

Fee: $12 per month

How to avoid Bank of America monthly maintenance fee: Maintain a balance of $1,500 each day or make one direct deposit equal or greater than $250.

Chase monthly maintenance fee

Fee: $12 per month

How to avoid Chase monthly maintenance fee: Maintain a balance of $1,500 each day, have $500 or more in your account through direct deposit, or have $5,000 or more in various qualified accounts.

US Bank monthly maintenance fee

Fee: $6.95 per month with electronic statements or $8.95 per month for paper statements.

How to avoid US Bank monthly maintenance fee: Have a balance of $1,500 or make $1,000 or more total in direct deposits.

TD Bank monthly maintenance fee

Fee: $15 per month

How to avoid TD Bank monthly maintenance fee: Have $100 or more in your account every day.

Citibank monthly maintenance fee

Fee: $12 per month

How to avoid Citibank monthly maintenance fee: Have $1,500 in qualified accounts or make one eligible direct deposit and bill payment each month.

Wells Fargo monthly maintenance fee

Fee: $10 per month

How to avoid Wells Fargo monthly maintenance fee: Have 10 qualified debit card transactions, make direct deposits of $500 or more to your account, or maintain a $1,500 balance every day.

PNC monthly maintenance fee

Fee: $7 per month

How to avoid PNC monthly maintenance fee: Make direct deposits of $500 or more or maintain a $500 balance each month.

How to never worry about a monthly maintenance fee again

As you can see, monthly maintenance fees vary by bank accounts and each financial institution has different requirements. While you may be able to meet the requirements to avoid bank fees, there is a better way to never worry about paying fees again.

You can simply open an account at an online bank or credit union that doesn’t charge fees. For example, Chime has zero monthly fees so you never have worry about maintaining a certain balance to avoid fees.



The Problem with Overdraft Fees

“Overdraft” is not a word we like to hear. Why? It generally means you’ll be dinged with a fee you don’t want to pay.

To clarify, an overdraft fee occurs when you don’t have enough money in your bank account to pay for a purchase. When this happens, your bank will pay for the transaction and charge you a hefty overdraft fee for the trouble, no matter how small the transaction.

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For example, say you purchase a $4 latte without realizing your checking account is close to zero. That single latte on your debit card now puts you in the negative, triggering a $35 overdraft fee – and making this the most expensive cup of coffee you’ve ever purchased.Banks charge overdraft fees for anything from a debit card purchase, to an attempted ATM withdrawal, to an automatic bill payment. It’s no secret that overdraft fees are expensive and unfair to consumers. But, you can avoid overdraft fees, and in some cases, negotiate them away. Read on to learn more.

Overdraft fees are expensive

Big bank are often the worst offenders when it comes to overdraft fees. In fact, Americans paid more than $15 billion in overdraft fees (sometimes called non-sufficient, or NSF fees) in 2016, according to published reports.

Most banks charge between $30 to $35 for the average account overage, but some charge more. Take a look:

In a nutshell, charging you these hefty fees is an easy way for banks to make money.

“(Overdraft fees) aren’t even closely related to the expense that the bank incurs, and serve more as a penalty than a fee for the required service,” says Chicago attorney and financial expert John R. O’Brien.

“They (fees) tend to be grossly excessive relative to the simple, inexpensive, and largely-computerized process of either returning a check, or notifying the customer that there is an overdraft and that he needs to make a deposit to cover it,” says O’Brien.

Worse yet: overdraft fees often hit low-to-middle-income Americans the hardest.

“People with large balances generally don’t have overdrafts, even if they make a math mistake in their checkbook,” O’Brien says.

Yet, those with lower balances are much more likely to overdraw their accounts by forgetting to record a check or other withdrawal, he says.

Other reasons you may be charged overdraft fees

Spending money you don’t have is one reason you may be charged an overdraft fee. But, those fees really begin to add up when you keep spending – not realizing you’ve already been charged an initial overdraft fee. Just think: for each subsequent transaction, you’ll incur yet another $35 fee!

To make matters worse, some banks levy an extended overdraft fee for each day that you don’t bring your checking account balance back to even. Bank of America, for example, charges an extra $35 per day if your account stays overdrawn for five consecutive days.

Making the most of overdraft fees

Thankfully, there are 4 ways to work around overdraft fees, and to be smart about them if you get hit with these expensive fees. Take a look:

1. Sign up for overdraft protection

Overdraft protection is when your bank allows you to use your savings account, a credit card or another deposit account to pay for purchases you can’t cover with your checking account. It automatically taps into the auxiliary account you’ve synced up with your checking account, and deducts the money from there. You’re charged no overdraft fee, but there may be additional charges that apply. Check with your bank to learn about any other fees.

2. Waive the fee

Overdraft fees aren’t always set in stone. If you’re hit with one, ask your bank if it will waive the fee just this one time. If you haven’t been overdrafted in the past, your bank may be willing to refund the charge back to your account.

3. Seek banks with no fees

Finding a bank with zero overdraft fees can feel like looking for that magic unicorn that doesn’t exist. But trust me, they’re out there. Chime, for example, is one bank that charges no overdraft fees of any kind. A Chime spending account is incapable of getting overdrawn. If you’re dangerously close to the $0 limit, the transaction will get rejected. The account will just wait until you’ve deposited enough money to cover your transaction.

4. Avoid getting overdrafted

Building a spending plan and working budget allows you to live within your means and spend only what you can afford. This will help ensure that you never get to a negative balance. Apps like Mint can get you started down the road of responsible spending.

You got this

We get it: it’s easy to lose track of how much you’re spending until you’ve spent more than you have. But, by keeping track of your budget and switching to a bank account with zero fees, you’ll be on your way to saving more and spending less.


6 Reasons an Online Bank Account is Better Than Traditional Banking

After a hectic day, the last thing you want to do is stand in line trying to get your banking done.

Yet, with the rise of online banking, waiting in line doesn’t have to be an issue anymore. Now you can do your banking without even leaving home. Online banking is not only more convenient but gives you the ability to save money, time, and even the planet.

Keep reading to learn more about why online banking is better than traditional banking.

Online Banks Have Lower Fees

Brick and mortar banks have enormous operational expenses that online banks simply don’t have. For example, they need specialized buildings to secure your money, state-of-the-art technology and equipment, and a large staff. They’re in the business to make money, not just store yours. That means fees go up when the bank’s expenses go up. With online banking, fees are kept to a minimum because the bank’s expenses are kept in check.

It’s Easier to Access Your Online Bank

Traditional banking hours aren’t always convenient. For some of us, getting to the bank before closing means leaving work early. It can also mean fighting traffic in the middle of the day, taking time off work, and waiting in long lines. If you do your banking online, there is no traffic and no banking hours. Yes, you may end up on hold waiting to talk to a customer service representative, but at least you can get stuff done while you wait.

Easy Deposits via an App

Most banks will let you make your deposits through one of their many ATMs. But what if you’re not near one of these cash machines? With online banking, making a deposit is as easy as snapping a picture and uploading it to an app. No added stops and no worries about leaving your deposit in an ATM all night (and hoping it’s picked up in the morning). But, if you really want to go to an ATM, most online bank accounts now offer access to a broad ATM network. Chime, for example, allows its members to use more than 30,000 ATM locations nationwide – for free.

Saving Money Can be Automatic

With online banking, saving has never been more simple. For example, you can set up automatic transfers to move money from a checking account into your savings. You can even start small by having Chime round up each transaction made with your Chime debit card. The rounded up amount will be automatically deposited into your savings account. If you want to take your savings efforts further, you can automatically move 10 percent of your paycheck into your savings account each time you get paid. This way your savings is funded with very little effort.

Experience Exceptional Customer Service

Because there are no buildings to staff and maintain, digital banks can often dedicate more resources to their customer service department. When you have questions or concerns, you just have to call. With customers all over the US (or perhaps even the world), the customer service departments at online banks are usually available outside regular business hours. Plus, if you don’t want to pick up the phone, most online banks offer chat features online or via an app.

Do Your Banking Online Because it’s Right for You

Online banking is a great tool. But remember, before you make the switch to an online bank, look at your own banking habits and determine if it is the right move.

Here are some questions you may want to ask yourself when determining if online banking is the best fit you:

  • Do you like going into a branch and talking with your banker or the tellers? If so, you may want to stick with a brick-and-mortar bank.
  • Is it a pain in the neck to get to the bank? If so, an online bank may be your best bet.
  • Do you have complex interactions that are easier done in person? If yes, you may be better off with your current physical bank branch.

As you can see, it’s up to you to decide what type of banking is best. Just keep in mind that if you’re looking for convenience and lower costs, you may want to keep your bank in your pocket.


How to Avoid Bank Fees

When you open a bank account, you’re taking a positive first step to managing your money. A bank can safely house your hard-earned cash, help you save money, and more. But, beware: a bank can also cost you money.

That’s right. You may not realize or even notice, but banks can tack on fees for a variety of things. For example, some financial institutions charge a monthly maintenance fee if your balance isn’t at a certain level, effectively punishing you for not having enough money in your account. Talk about adding salt on the wound. And if you overdraw on your account, you may be hit with an overdraft fee, too.

While these fees may not seem like a lot, they can add up. Monthly maintenance fees can be $12 per month and overdraft fees are around $35. Good banks, on the other hand, won’t nickel and dime you with fees. If you want to avoid paying bank fees, here 3 steps you can take.

1. Find out what fees you’re paying

The first thing you want to do is actually know what fees you’re paying for. But don’t fret, this process won’t be time-consuming or require you to comb through all your accounts. Using BankFeeFinder.com, you can easily see just how much you’re paying in monthly maintenance fees, overdraft fees, and more.

Your findings may shock you. According to the Bank Fee Finder 2017 Summary Report, Americans on average pay a whopping $329 per year in bank fees. So, find out what fees you’re paying for, as this way you’ll know where your money is going.

2. Read the terms and conditions

You may have seen an unexpected monthly maintenance fee as you scrolled through your checking account. Perhaps you thought: “What is this?!” Banks may tack on fees and require you to meet certain minimums in order to waive those charges.

If you want to avoid bank fees, you can start by reading the fine print on your accounts. Is there a monthly maintenance fee and if so, what conditions do you need to meet in order to avoid paying it? Are there overdraft fees and if so, how much are they?

The first step is knowing what bank fees you can be hit with. Once you know what the fees are, make sure you have a clear understanding of what conditions can trigger these fees. Then, aim to meet the conditions and requirements so that you don’t end up paying fees.

3. Switch to banks with no fees

What if you’re just sick of bank fees altogether? You’re tired of trying to play a game with your money and keep certain minimums or meet requirements to avoid fees. If this sounds like you, it may be time to switch financial institutions and use banks with no fees.

Many big banks charge overdraft fees, monthly maintenance fees and more. If you want to avoid bank fees, you should consider looking for banks with free checking or consider an online bank account or credit union. Many online bank accounts like Chime, as well as credit unions, have no overdraft fees or monthly maintenance fees. Online banks, for example, don’t carry hefty overhead costs as they don’t have brick-and-mortar locations. They pass along these savings to you in the form of no fees. This means you can keep more of your hard-earned dough.

If you’re ready to ditch fees for good, you can open a bank account online. There are plenty of good banks out there, so make sure you find one that fits your needs. For example, perhaps you want to make sure there are ATMs in your area and that you’re getting a free checking account. And, remember: read the fine print and make sure you won’t be hit with overdraft fees or monthly maintenance fees.

By making the switch to an online bank or credit union, you can put money back into your pocket and avoid annoying, unnecessary bank fees.

Bottom line

Bank fees may seem like they’re a fact of life, but they’re not. The key is to be aware of fees in the first place and take action so you can avoid them. Lastly, stay on the look-out for banks with no fees and this way you’ll never have to worry about an unexpected fee again.

Banking Services provided by The Bancorp Bank, Member FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Chime and The Bancorp Bank, neither endorse nor guarantee any of the information, recommendations, optional programs, products, or services advertised, offered by, or made available through the external website ("Products and Services") and disclaim any liability for any failure of the Products and Services.