What to do about bank fees

Ask NJMoneyHelp

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Q. I’m sick of bank fees. It seems every time I change accounts to get a benefit, the fees change and I’m shopping again. What I can I do?
— Nickeled and dimed

A. Bank fees certainly are frustrating, but you have the choice. Move your accounts if you’re not happy.

In general, credit unions and internet banks will have fewer and smaller fees than brick-and-mortar banks, said Ken Tumin of DepositAccounts.com, which recently did a study on overdraft fees.

He says when you start shopping around, look for banks or credit unions with accounts that have no monthly minimum fees and no fees when using other banks’ ATMs. Many internet banks offer accounts like this.

But also beware of lesser-known fees that are common among all banks and credit unions.

First, there’s the “inactivity fee.”

“If you haven’t had any transactions on your account over a certain period of time, many banks and credit unions will start charging a monthly fee until there’s a transaction,” Tumin said.

Then there’s the “excessive withdrawal fee” from savings and money market accounts.

Tumin said these accounts are limited by federal regulation to no more than six withdrawals per month when done electronically or by check. To satisfy this regulation, banks and credit unions will typically charge a fee when you exceed six withdrawals, he said.

Also take steps to avoid overdraft fees.

“Link your checking account to a savings or money market account,” he said. “If your checking account balance is too low to cover a debit, the bank will automatically transfer from the linked account to cover the shortfall.”

This is called overdraft transfer, and many banks and credit unions now don’t charge for these transfers, he said.

You can also opt out of automatic overdraft protection, instead allowing for declined transactions when funds are insufficient.

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.