How to Avoid Fees

Written By Jeff Hindenach
Last updated December 1, 2020

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October 5, 2020

Simple. Thrifty. Living.

Many credit card companies, banks, and investment brokerages charge fees for their services. Individually, the fees feel quite small. If you can avoid fees, though, you will save money that lets you grow your wealth over time. Below, you will learn how to get rid of fees that companies charge for popular accounts and services.

Banks typically charge checking account fees for:

  • Monthly maintenance.
  • Overdrafts.
  • Falling below a predetermined balance.

Before you open a checking account, read the fine print so you know how to avoid fees. Many banks will cancel your monthly maintenance fees when you maintain a certain balance. For example, you could avoid fees by keeping at least $1,000 in your account at all times.

Banks might also give you a free checking account when you open a savings account. Again, you may need to keep a certain amount of money in the account to avoid charges.

Finally, always make sure you have enough money in your account to cover your payments. Overdraft fees can cost anywhere from $25 to $50, so you want to avoid them. Keep in mind that you will get fined for each overdraw. If you write three bad checks, you will get charged three penalties.

A lot of credit cards charge annual fees, especially when their members don’t have long credit histories. Some research shows that up to 70% of people who ask companies to waive their annual fees get what they want. A 10-minute phone call could eliminate an unnecessary fee. After all, the credit card provider doesn’t want to lose you as a customer. It makes most of its money from interest charges.

If your credit card company won’t waive the fee, then threaten to close your account. Plenty of banks would love your business, so use that as leverage. It might help to have some zero-fee offers in front of you during the conversation.

Get Rid of Late Credit Card Payment Fees

Late fees cost you money in more than one way. Companies can use the late payment as an excuse to raise your interest rate.

Somewhat surprisingly, 84% of consumers have their late fees waived when they call their credit card companies and discuss the issue. Ideally, though, you should avoid this problem by paying your bills on time. Doing so should improve your credit score.

A good or excellent credit score makes you look less risky to companies. If you have a 750 score, you can probably ask for no fees when you open bank accounts, credit card accounts, and even utility lines.

A great credit score will also encourage lenders and investment brokers to charge you lower fees and interest rates. If you have a low credit score, work to build it as quickly as possible. A great score will save you money throughout life.

Not sure how to avoid fees for some services and products? Pick up the phone and ask. You never know what response you will get.

About the Author

Jeff Hindenach

Jeff Hindenach is the co-founder of Simple. Thrifty. Living. He graduated from Bowling Green State University with a Bachelor's Degree in Journalism. He has a long history of financial journalism, with a background writing for newspapers such as the San Jose Mercury News and San Francisco Examiner, as well as writing on personal finance for The Huffington Post, New York Times, Business Insider, CNBC, Newsday and The Street. He believes in giving readers the tools they need to get out of debt.

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