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It used to be that you had to screw up to get slapped with a bank fee. Like spending the money before it’s in your account or being late on a payment. Now, consumers can do exactly what they’ve been doing for years and somehow still get slammed by fees … if they’re not paying attention.

Unfortunately, bank fees aren’t one of those inflationary items that rise and fall. They’re more like the price of postage stamps: The only way to go is up.  The one saving grace for consumers, it opens the door to competition, just like we’re seeing in the airline industry where some carriers are setting themselves apart by not charging baggage or other fees.

The number of banks offering free checking accounts may be on the decline but it’s nowhere near extinct. A recent survey found that 88 percent of accounts are still free.

Local banks, credit unions and online banks tend to be more likely to offer free checking than their big bank counterparts.  If you’d prefer to stay with your own bank, ask about their policies for how to get fees waived or reduced.

Five common hidden Bank Fees you should be looking for:

  1. Subtracting Electronic Payments Early
  2. Ordering Transactions from High to Low
  3. Debit-Card Overdraft Fees
  4. Raising the Minimum Balance Required
  5. Returned Mail Fees


1.      Subtracting Electronic Payments Early

Wachovia customers who pay their bills online were used to having their payments deducted from their accounts and paid to the creditor on the same day. When the bank was taken over by Wells Fargo , however, many Wachovia customers were surprised to learn that the policy had changed, and the funds were being withdrawn from their accounts two to five days before the payment was due.

So, even those customers who are diligent, scheduling payments after their paycheck is deposited, are now at risk for an unexpected low-balance fee.

The unexpected fees caused such an outcry among former Wachovia customers, that Wells Fargo recently addressed the switch in a blog post: “At Wells Fargo, funds to pay your bills will be withdrawn from your account up to five business days earlier than they were at Wachovia,” they wrote. “With Wachovia BillPay you selected and had a payment sent on a Pay Date. No longer! At Wells Fargo, you enter a Send On date. Funds are removed from your account the next business day after your Send On date.”

2.      Ordering Transactions from High to Low

It used to be that banks posted transactions chronologically — so, the order they came in is the order they are paid out. Now, many are choosing to process the transactions by size — paying out the highest ones first, which increases the customer’s chance of getting snagged by a low-balance fee.

So, instead of maybe getting hit with one overdraft fee, the customer now runs the risk of being hit with multiple overdraft fees. The worst part is that bank disclosures about this are often vague. Many banks will not specify which way they will post your debits and others will be very vague with a statement like: “We can post credits and debits any way we like.” In fact, Wells Fargo was ordered by a California court to pay their customers $200 million for overdraft fees that resulted from reordering how they post transactions without clearly explaining to customers how they planned to do it ahead of time. When customers wrote a note to complain, that’s when Wells informed them that they were posting the transactions highest to lowest.

3.      Debit-Card Overdraft Fees

The whole purpose of a debit card was supposed to be that it prevented you from spending more than you have. But somewhere in the mid-2000s banks started routinely approving overdraft charges on a debit card and then slapping their customers with an overdraft fee. A few years ago, the Federal Reserve clamped down on this practice and told banks they can’t approve overdraft charges unless the customer consents. That’s when banks started sending out a barrage of “Sign up for overdraft protection or you won’t have a dollar to save your life when you need it” notices.

Those seemed like scare tactics for unnecessary services but they were quite effective and a lot of customers signed up for overdraft protection.

Citibank never engaged in the practice of charging overdraft fees on debit cards, and Bank of America responded very well to the Fed’s new rules, declaring they would no longer charge overdraft fees on debit cards. JPMorgan, Chase, and Wells Fargo continue to charge these fees.

While any offer of “protection” from a bank is likely to trigger doubt, it’s not a bad idea to sign up for overdraft protection if your bank is offering it for free.

4.      Raising the Minimum Balance Required

While everyone was watching to see if their bank started charging a monthly fee, many banks snuck up on them from behind and raised the minimum required balance to avoid a monthly fee.  If your balance falls under that amount, BAM! They slap you with a fee.

The average minimum balance among banks that have a minimum balance requirement jumped 15 percent last year to $3,800 from $3,300 in 2009, according to

5.      Returned Mail Fee

It’s important to inform your bank of an address change for your own protection, but it can also cost you if you don’t.

When you change your address, make sure the bank gets it right. Some bank customers have noted that their banks instituted a fee for not having the right address. After some investigating they found that even though they had notified the bank when they moved, the bank had input the address incorrectly.

BankfeeInsider Tips on how to save money on hidden bank fees

Here are some Insider tips to keep more of your money in your account:

  • Read all disclosure documents thoroughly and monitor your bank statements closely.
  • Sign up for email or text alerts so you know when your account balance is running low.
  • Ask questions of the bank about the types of fees they charge and the terms and conditions of the account.
  • Consider linking your checking account to a savings account to cover potential overdrafts.
  • Shop around. Compare banks and find one that charges the lowest or fewest fees.
  • Provide yourself a cushion. This is easier said than done, but it can save a lot of heartache down the road.
  • Spread out transactions to avoid getting caught with insufficient funds no matter what trick the banks pull.
  • Know the difference between opting out and opting in. If you opt out of overdraft protection, you won’t be able to use your debit card if you don’t have enough money in your account.  You may be embarrassed, but you won’t pay a fee.

The most important thing for consumers is to remember that in this brave, new world of hidden bank fees — no one is safe. Read the fine print — and no skimming!

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