In the age of social media, customers can connect with an audience of millions of people, instead of just with their community of tens or hundreds of people. For banks, the inexpensive and fast social media model offers some convenience for connecting with customers, marketing services and maintaining a reputation as a quality service provider. However, banks face some unique limitations because of the nature of services provided that complicates their social presence.

How consumers interact with banks socially

In this age of social media, consumers face more choices than ever. They also face an increasing model of self-service: If you need a new bank, it’s easier than ever to research neighborhood banks online using sites like or After reading about the customer service, wait time, account types and account fees at six neighborhood banks, you can decide where to open a business bank account without ever even setting foot inside a bank. You might not even visit the bank’s website. When a business owner uses his or her social networks to make decisions, it takes a lot of power away from the financial institutions, who lose out on the chance to make a positive impression on potential customers.

Once a business owner selects a bank and opens an account, she may engage with the bank on social media. Unless the bank offers incentives via social channels, such as a YouTube video series on making budgets or saving for college, she’s more likely to take to Yelp, Facebook or Twitter to air a grievance with the bank.

How banks can use social media

While banks can use social channels to monitor customer feedback and problem-solve, there are some limitations. A small business owner may tweet a bank asking why their refinancing application was turned down. The bank cannot tweet back the details of the customer’s application, as this would be an ethical violation.

93 percent of consumers surveyed by the Financial Services Club felt that banks must focus on social media over the next five years to stand out within the marketplace. Simple ways to start include:

Developing a bank blog that raises customer awareness of services, either B2C or B2B
Monitoring social networks for community trends, then positioning your bank to creatively problem solve
Actively listening to customers on social media by soliciting customer feedback via Twitter, YouTube and Facebook — and then reviewing and acting upon the feedback received
Launching a charitable giveaway or contest via social media, where your bank donates to a chosen charity for every new account referred socially
Incorporating social media into your customer service as a first-line of defense
Planning smart for social growth

While there are many ways to incorporate social networking into a bank’s marketing, the right ways will focus on fulfilling a need that is going unmet. For some banks, this may be in marketing and growing a particular sector or service, such as retail banking. Others may need better customer service. Before committing to a strategy, perform a needs analysis to ensure that any social program is actively meeting your bank’s needs, not conforming to a trend.

Despite Federal legislation to help keep bank fees in check, fees for things like overdrawing your account and stopping payment on a check as well as the general account monthly service fee for a checking account, continue to rise. So do the minimum amounts required to open a checking account. According to a study quoted by “Forbes” magazine, all 50 of the largest banks in the United States raised their fees in 2012. According to “Time” magazine, bank fees are nearer record highs with no end in sight. “Time” found that online banks averaged the lowest monthly fees, with small local banks being the next best choice.

Avoiding fees

Some U.S. banks waive some of their service fees for customers with larger balances, usually a minimum of $1,500 or with multiple accounts at the bank. Other banks waive the service fee for customers who have their paychecks deposited via direct deposit, although some institutions, like Fifth Third Bank, are merely reducing the service fee for such customers, not waiving it completely. According to the “Time” magazine article, only 22 percent of accounts America’s big banks had no associated service fee.

New Bank Fees

Service charges and overdraft fees aren’t the other things banks are charging customers for. Increasingly, America’s banks are charging fees for things like using the bank’s online bill paying system, access your credit score or getting priority service when you telephone the bank’s offices. It’s a fair assumption that bank fees are here to stay, in one form or another.

Finding low bank fees with Bank Fee offers an easy way to shop for the banks with the lowest fees in your area. Nobody wants to pay more for their checking account, saving account of other banking services than they have to pay. Bank fee makes it simple to find the lowest bank fees in your area without a hassle. You just enter your zip code, answer a few questions about the banking features that are important to you and about how you bank. You’ll have a list of results in just seconds.

These days it is far too easy to look at your bank statement and find that an unforeseen fee has shown up on your bank statement. Whether it is an overdraft fee, ATM usage fee, or simply a service change that your bank hid in the fine print, these are things you definitely want to avoid as much as possible. Here is a breakdown of the fees and some ways that you can potentially avoid them.

Service Charges

Some banks are certainly slicker than others at passing on service charges to their customers. However, some also make it more known when they implement such charges. So, whether it is obvious or not, you should always look at the fine print when opening a checking account. When opening an account in-person at a branch, be sure to blatantly ask the teller or bank employee helping you. They are obligated to tell you about any service charges if you ask.

ATM Fees

The best way to avoid ATM fees is to use machines owned or associated with your financial institution. Otherwise there is typically a fee per transaction that you incur on other ATMs. In some cases these fees can be a couple dollars, but in extreme cases they can add on a double digital amount. In an emergency this fee is bearable, but if you start to make it a habit it would save you a lot of money in the long run to find an ATM associated with your bank.

Overdraft and Insufficient Funds Fees

Another common fee related to checking accounts is that due to an overdraft or insufficient funds. These fees are common because of the large volume of transactions that typically occur on someone’s checking account statement. A great way to avoid such fees is to opt out of your bank’s overdraft protection, which although sounds enticing, can lead to frequent fees when you run out of funds. The downside to opting out of overdraft protection is that your bank will not cover any transaction you do not have sufficient funds for, and the transaction will subsequently be denied. The choice is obviously up to you, however, having a transaction declined is far less costly than incurring a $40 fee every time your checking account has an overdraft.

For more information of avoiding fees from your bank, check out, an excellent resource for all financial matters

At the center of much debate is the amount of money that banks charge their customers in fees. Customers may see fees on their bank statements for many activities, even normal use of their account. These fees may seem small on their own, but when added up, they culminate in billions of dollars worth of income for banks each year.

So, what are some of the fee types that retail customers may see from their banks? The following are just a few types of fees that are charged:

* Monthly fees for each account;
* Low balance fees;
* Overdraft fees;
* Debit card usage fees;
* Account maintenance fees;
* ATM fees;
* Card replacement fees;
* Paper statements;
* Wire transfer fees.

These fees add up to millions per year for banks, and in some cases comprise the bulk of a bank’s income. But just how much are banks making off these fees each year?

It is estimated that banks need to make $15 to $20 per month off each customer to enjoy the high profit margins that they were seeing before the changes in overdraft fees. A basic checking account costs a bank $200 to $300 per customer per year, so low balance accounts yield no profit and can sometimes even cost a bank money. As a result, banks are finding more things to charge seemingly minimal fees on. Some banks charge as much as $12 per month in maintenance fees; these fees are basically a charge for having an account.

A few years ago, governmental regulations were passed that put a ceiling on the amount that banks could charge customers for overdrafting accounts. This legislation aimed to stop “usurious” and unfair overdraft fees. According to a news piece published in the New York Times, these fees amounted to more than $12 billion per year. This helped banks offset the income that is lost by lending money at the recent low interest rates that consumers enjoyed. The lowering of interest rates alone culminated in an $8 billion per year loss of income for banks. Even with new legislation changing the amounts and methods banks can use to charge fees to customers, banks still made $32 billion in fees off customers in 2012.

Whose services are better — large commercial banks or small community banks?

The answer to this question depends on who is being served. Simply put, large commercial banks provide better services for large businesses and small community banks provide better services for small businesses.

According to the Federal Deposit Insurance Corporation (FDIC), community banks are “independent banks and savings institutions and bank and savings institution holding companies with aggregate assets (of) less than $1 billion.” More than 90 percent of the banks in the United States fall into this category, according to the Independent Community Bankers of America, which reports that there are 7,000 community banks in the nation.

Commercial banks clearly have more money so they are in a better financial position than community banks to make loans to people and companies that need a large amount of money, typically large businesses. They are also far more able to make riskier loans to customers because a loan that isn’t repaid will have a significantly smaller impact on their financial stability.

In addition, commercial banks “typically” are open more hours during the week than community banks and are more apt to offer customers a “variety of credit cards options,” according to an article in the Houston Chronicle entitled “Community Bank vs. Commercial Bank.”

However, a report by the Independent Community Bankers of America entitled “Community Banking Facts” says that community banks offer a tremendous amount of services, including all-day electronic banking, credit and debit cards with “competitive rates and features,” and automated teller machines (ATMs) that don’t charge customers fees.

More importantly, small community banks often are more flexible in loaning money to companies, particularly small companies, “with a long history of local operations,” while large commercial banks have “more restrictions” on small business loans and “narrower ranges of services for small-business owners,” according to the Houston Chronicle.

“Many community banks are willing to consider character, family history and discretionary spending in making loans,“ the Independent Community Bankers of America says in its “Community Bank Advantages” report. “Megabanks, on the other hand, often apply impersonal qualification criteria, such as credit scoring, to all loan decisions without regard to individual circumstances.”

The community bankers’ organization cites statistics that back up its claims that community banks are more apt to help small businesses and farms. It says that loans from small community banks comprise 37.5 percent of the amount of money loaned to small businesses although those same banks have only 10 percent of the industry’s assets.

On other service-related issues, the Independent Community Bankers of America also says that community bank officers are more accessible to customers than commercial bank officers and “research has shown average fees for checking accounts and other depository services are lower at community banks than at large, multi-state institutions.”

On the other hand, large commercial banks offer better services for people planning their retirement than small community banks because their investment products are superior, according to the Houston Chronicle.

The bottom line is that people who are seeking banking services need to consider their own needs before choosing a large commercial bank or a small community bank rather than making an overall assessment about whose services are superior.

Checking accounts are often a necessary part of paying your bills and managing your finances, but the cost of maintaining your account can add up quickly if you are not careful. Although every bank offers different types of checking accounts, the process of reducing those fees is similar.

Learn About the Fees

Before you can take any action, find out why you are being charged. For example, some checking accounts may require that you maintain a minimum balance. If you drop below that amount, then you are charged a service fee.

Find out why they are charging a fee so that you can avoid unexpected costs that you did not plan in your budget.

Set Up Appropriate Services

Fees are not only charged when you have too little in your bank account. In some cases, you are charged if you do not set up specific services, such as direct deposit. If there are any services that you are required to set up, then make appropriate arrangements so that you are not being charged.

When you do not have direct deposit available through your work, such as when you own an online business or work as a freelance professional, ask about alternative options. Some banks may count payments through online payment services as a direct deposit if you make a request.

Ask About Free Checking

Some banks still offer a free checking account, though the services that are available may be slightly more limited than accounts that charge a service fee. Find out if your bank offers a free checking account or ask around to other local banks.

A checking account is useful because you can pay bills, make debit card payments and arrange a strict budget. The downside is that you may face service fees and other additional costs that you did not expect. By taking steps to cut out the cost of additional fees, you can avoid unnecessary expenses.

According to a recent piece on USAToday, Bitcoins are becoming an international craze. Some banking institutions have banned the use of Bitcoins, stating that they are too risky, while others are embracing the new method of payment and predicting that Bitcoins will give other virtual payment processors a run for their money. As a consumer, what can you expect to see from the new Bitcoin frenzy?

Bitcoins are gaining popularity, and a small contingent of Bitcoin enthusiasts have driven the value of Bitcoins up from less than a dollar to more than $1,000. There are already several brick-and-mortar businesses that accept Bitcoins as payments, and they may be purchased using dollars, Euros and other types of international currencies. Bitcoins are convenient and easy to use.

There are a few obstacles that stand in the way of Bitcoins becoming as wide spread and popular as other types of virtual payments. First is the fear and hesitation that many financial institutions have when it comes to Bitcoins. This is a relatively new method of payment processing, having only been created in 2009 but just recently gaining popularity, so there is still a lot of uncertainty surrounding them. It is imperative to have banks and other financial instititutions on board to make Bitcoins a viable payment processing method for everyone.

There are also regulatory issues. Bitcoins will need to be monitored by government regulatory agencies, and businesses that accept this form of payment will be subjected to anti-money laundering regulations. Bitcoins are difficult to track at this time, but the United States Department of Justice has deemed them an acceptable form of payment, so the government is taking strides to get on board with tracking Bitcoin payments.

Some critics see Bitcoins as just a fad that will fall by the wayside in the future, but experts are saying that Bitcoins may be here to stay. Only time will tell, but this is definitely an issue that is exciting and something to keep a close eye on.

Using a checking account to pay for groceries, gas and other necessities may be a smart way to reduce debt and avoid credit card purchases, but it also comes with a risk: overdraft fees. If you are not careful when you are making purchases, then you can accidentally spend too much and face unexpected costs. Before you make another purchase, take a few minutes to reduce your risk of overdraft charges.

Set Up Online Banking

A simple way to determine how much money you have at any time during the month is with online banking. Many banks offer online banking services that allow you to keep track of your funds, transfer money from your savings account and identify potential problems that may occur.

When you know that your bank account is getting a little slim, such as shortly before your next paycheck, sign into your account and find out how much money is available. That will help prevent overspending so that you do not face high-cost charges.

Create a Buffer

If you have money in a savings account, then transfer some of it into your checking account as a buffer against overdraft fees. Depending on your bank, you may be charged, even if you still have money in the account, because it may drop below the minimum amount that you are required to maintain.

Creating a buffer with a few hundred dollars extra will help reduce your risk of facing high-cost fees.

Ask About Linking Accounts

Some banks may offer services to link your savings account or your line of credit with your checking account. If that is available, then link your accounts. In that way, your bank will automatically withdraw the funds from the linked account when you overspend.

Overdraft fees can add up quickly, especially if you keep spending when you’ve already exceeded the limit. Fortunately, it is possible to avoid those fees with a few simple tricks that ensure you have funds available when you need them.

During a money emergency, you may need to withdraw cash from an ATM quickly. For example, you might need cash to pay the tow truck or you might discover that the movie theater is only accepting cash because its machine broke down. Regardless of the reason, those emergency ATM transactions can add up quickly. It may not always be possible to find an ATM from your bank, but that does not mean it is impossible to reduce the unexpected expense.

Ask About Reimbursement Options

When you open up a bank account, ask your bank about any ATM reimbursement programs or options that may be available. Some banks will offer free ATM services and ATM reimbursement for out-of-network ATM fees if you sign up for online services or similar programs. Since the online services and similar programs are often free, it can help when you need a little bit of cash and do not have time to look for your bank’s ATM.

Make Use of Smartphone Applications

Smartphone applications that help you find a surcharge-free ATM in the nearby vicinity can help reduce the cost dramatically. Even though your bank may still charge a small transaction fee, which may be around $1 to $1.50 for most banks, the ATM will not charge an additional fee. That can cut the cost of fees by half or more, depending on the location.

Use Your Bank’s ATM

If your bank has a branch near your location, then use that ATM machine. An ATM from your own bank will not usually charge any ATM fees.

During an emergency, you may not have the time to search for a local branch of your normal bank. If you cannot find your bank or you do not have the time to get to it, then you can make use of reimbursement programs and surcharge free ATMs to cut the cost of withdrawing cash when you need the money immediately.

© Copyright Bank Fee Insider. All Rights Reserved.