The New York Times is reporting that several banks have recently upped a host of fees. Everything from balance transfers to ATM withdrawals are costing customers more. Overdraft fees also continue to rise. The fees have recently increased by a dollar, which may not seem like much, but overall they’ve jumped several dollars over the past few years. The report claims that banks rarely increase fees during recessions, proof that banks are looking for pockets of additional income to offset loan losses and reduced revenue.
If you regularly or even occasionally are stamped with an overdraft fee, it’s time to take steps to prevent them. One of the easiest things you can do is sign up for overdraft protection that connects another bank account, like a savings account, with your checking account. When you overdraw, money is automatically transferred, thus eliminating the overdraft fee.
Keeping a structured budget will also help prevent overdrafts on your account. You may also want to consider stopping certain bills from being automatically paid. That way the money will only leave the account when you are sure there are sufficient funds. This could be risky though, because if your bills aren’t on time you may end up paying late fees.
Another important step is to learn your bank’s overdraft policies. Find out when fees are applied, if there is any grace period and how often the fee is tacked on. In any case, overdraft fees are nothing to brush off. They are becoming more costly so a simple mistake can create more stress and financial hardship than ever before.