Is Your Bank Ripping You Off?

By Larry Lane for InvestorZoo.com

The recent economic disaster has forced banks to re-evaluate how they do business. Previously they had lent money to anyone with a pulse and handed out credit cards to everyone. Unfortunately, that business model didn’t quite work. Home foreclosures and credit card delinquencies are at record levels.

In order to make up their losses, your bank may look to you as a new source of income by charging new and unheard of fees. Long gone are the days of receiving a free toaster for opening a new savings account. However by shopping around, there are still good banks and deals to be had.

1) Free checking: Most banks are offering checking accounts without monthly service fees. You’ll want a checking account without a mandatory minimum account balance. Some banks may offer “free checking” but charge you $5.00 every time you go below a set minimum balance of $100 during the month.

2) Ask for free checks. New checks for your checking account can cost upwards to $20 or more. Ask for a free box of starter checks. Sign up for online banking if you have internet at home. Not only will you be able to save money on checks, you’ll also save $50 or more per year in stamps.

3)Try banking alternatives such as credit unions or online banking: It took me about 10 minutes to set up my online banking account. I was able to get a 2% interest rate on my checking account. Most likely you’ll have to pay your bill online and speak to someone by phone or instant message if a question arises. Don’t like to go online? Try your local credit union. Credit unions are known to pay higher interest on checking accounts since they have to compete with large mega banks.

4)Overdraft fees: Bouncing a check will set you back up to $50 or more. If you do bounce a check and it was an honest mistake, drive to your local branch during off peak times (10am-11:30) and speak with a bank representative. In most cases, you will be able to get the fee reduced or eliminated. If you don’t get satisfaction, speak to the bank branch manager. Banks know there is a lot of competition and don’t want to lose you as a customer.

5)Shop for free money! A few months after the government decided to pass out TARP money, banks went on a spending spree to acquire customers. Many similar deals are still available today. For example, I opened a new Wells Fargo account with a $100 and was given a $100 bonus. Not bad for 10 minutes of paperwork on my lunch hour. Chase Manhattan paid me $50 to switch my regular account from Bank of America and instantly credited me another $100 for starting up a money market account. If you find yourself running short of money of every month, do some research or check our home page. Starting in April, you will be finding new deals from companies who provide cash incentives and higher than average returns for bank accounts. We hope to update this list two to three times per week on our home page as well as our Twitter page.

Yes, opening and closing new accounts will take time and effort. However, if you can make $50 for 30 minute of work, that’s like making $100 per hour.

Being a better bank shopper will not only cut down on unnecessary expenses, but done correctly could turn into a profit. The next time you want to splurge on a nice dinner out or see something at the mall you really like, get it! After all, your local banker helped pay for it.

Larry Lane is the editor for InvestorZoo.com, a social networking site dedicated to personal finance. Email questions and comments to Larry.Lane@InvestorZoo.com
The article above is intended to provide information of a general nature and may not be suitable for your individual situation. Please consult a qualified licensed financial advisor before making any financial decision.