Fees and How to Avoid Them

Does it seem like wherever you turn everything is costing you more? A client of mine in the automotive business was saying that, with rising fuel costs, he felt as if he had an additional mortgage payment. In turn, fuel costs are affecting the price of food and other supplies. Everything we buy has to be shipped in. Grocery stores and retail chains have had no choice but to raise prices to cover the cost of shipping.

So what do you do to make ends meet? Saving money often means avoiding any costs that aren’t absolutely necessary. But, there is a way to cut costs without feeling deprived, and that involves getting rid of all those extra fees.

Avoiding fees can save you money. I’m going to divide fees into two categories: bank account fees and credit card fees.

Bank Account Fees

Do you have free checking with your bank? If not, find out how to get it. Maybe you just need to have your paycheck direct deposited. Maybe you need to link your savings and checking account together to maintain your minimum deposit. Whatever it is, find out and do it. You should have no monthly charge for your checking account. If you don’t qualify with your bank, then switch banks.

Once your account is free, then you need to avoid the other fees associated with your bank account, such as: overdraft fees, ATM fees, uncollected funds fees, and others like these.

ATM machines are very convenient, but they could be costing you. If your bank doesn’t have many strategically placed ATMs where you live or vacation (and spend money) make sure to avoid using another bank’s ATM. If you do, you can be charged by both banks for each transaction. Ouch. If you’re not the type of person who checks their bank statements regularly, these types of fees may be going unnoticed.

Speaking of not checking your bank statements, a great way to avoid fees is to keep track of your bank balance. Know how much you have available before you make a purchase. This is key to avoiding those really costly overdraft fees.

Credit Card Fees

Interest rates aren’t the only extra expense on your credit card. Credit cards come with a variety of fees, such as: over the limit fees, returned payment fees, late fees, and more. Know your credit card! In fact, if you don’t want to read all the fine print on your card agreement, go ahead and call the 1-800 number to ask them. Make a list of fee amounts and put it where you can see it often. This will remind how much that little piece of plastic is costing you. Here are some things to put on your list:

• Credit Card Name
• Application Fee
• Cash Advance Fee
• Service Fees for Claiming Credit Card Rewards (yes, really!)
• Balance Transfer Fees
• Over the Limit Fee
• Late Fee
• Returned Payment Fee
• Minimum Amount Due Each Month
• Purchase Interest Rate

Then, when your bill comes in, watch for any changes in the amounts above. If you’ve made even one late payment, those fees can go up – a lot! Credit cards are convenient but they can be very expensive to use.

Many of the worst fees can be avoided by making your payments on time. As you are aware, the higher your credit score, the better terms you will be offered by your creditors – meaning lower interest rates on the credit card itself. That means more money in your pocket. Make this a top priority for your finances.

The Mortgage Arrangers, LLC
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