Cutting Fees to Save Money

In times of economic instability where job security is a becoming a thing of the past, one must start thinking and living frugally. One way to do this is by cutting the unnecessary fat from our spending. The most inconspicuous fat in our monetary lives are fees. There are many hidden fees in our lives and if we find out what they are, and how to reduce them, they can turn into little ways to save money each year. Let's examine cutting fees to save money.

Bank fees have the greatest potential to drain our funds. Today bank fees can range from $2 to $40 for various reasons such as:

1. Overdraft

2. Insufficient funds

3. Account maintenance

4. Non-bank ATM usage

5. Check/debit card ordering

6. Stop payments on checks

One of the most well hidden banking fees you may not know about is related to a limit on transactions to and from your savings account. Regulation D sections 204.2(d)(2) and 204.2(d)(4) lay out the limits and your bank's recourse of action to enforce those limits. Section 204.2(d)(2) allows for only six transfers, withdrawals, or a combination of both, every four weeks or statement cycle. In addition, no more than three of these allowed six, can be made by check, draft, debit card, or similar deposits made by you and paid to a third party. In section 204.2(d)(4), banks can either prevent additional transfers from your savings account or they have the option of exacting fees. Since banks are in the business of making money, you are more than likely to be hit with a fee.

Credit and debit cards come with numerous fees that are often in plain view in your cardholder agreement, thanks to the Schumer box. However, additional fees can creep up for credit cards in your billing statement inserts. Of course, there are the standard fees such as over limit and late fees; however, many fees are present that are not readily recognizable as fees.

Fees under the guise of percentages are the most common of the hidden credit card fees. Cash advances usually charge between two and four percent of the amount obtained, plus the APR is often higher than that for purchases, and there is no grace period for cash advances. This means as soon as you take out a cash advance you begin to accrue finance charges. Plus, the low APR you have for purchases could be snatched from you if one late payment or over limit occurs on your account.

Pre-paid debit cards have fees for any type of transaction you may make. There are fees for loading funds, transaction fees, non usage fees, ATM fees, and if you want to get away from paying transaction and ATM fees you can opt for a monthly fee for some issuers. Debit cards linked to your bank account do not come with the fees that their pre-paid counterparts do, however, they are subject to the same fees outlined in your checking, savings, and/or money market account documents. Unfortunately, debits cards can overdraw your account due to the following:

1. Delays in processing debit transactions.

2. Inconsistent record keeping on your part.

3. Your bank allowing transactions to process even though you have insufficient funds in your account.

Number three can cost you hundreds in one statement cycle if not realized initially due to overdraft, insufficient funds, and sustained overdraft fees which can easily pile up before your bank sends you a notice of the overdraft. In addition, ATM fees can add up over the course of a year, especially if you use an ATM machine not owned by your bank. Banks can charge anywhere from $1 to $3 for using their ATM and your bank may add an additional $1 to $4 on top of that.