There's nothing more frustrating than losing your hard earned cash to expensive or unnecessary bank charges. Whilst some may be inevitable, there are definitely a number of charges that are avoidable if you are careful.
Here's a list of a few charges that you can avoid with a little careful planning.
Over Draft Fees
With most banks you can usually agree and overdraft limit. This means a set amount of money that you can take out of your bank account, even when your "real balance" is £0.
Although it costs you less than an ‘"unplanned overdraft" (where you go overdrawn without an agreement with your bank), these are still expensive. Many banks will charge you a weekly or daily rate for every day your account is below 0. They will also charge you large amounts of interest.
Furthermore, you are likely to also be charged for any unsuccessful direct debits that try to be taken out of your overdrawn account but are denied due to insufficient funds.
Some good ways to avoid overdraft fees are:
- Set a text alert. You are 24% less likely to go overdrawn if you use an app or text alert service. Most banks will allow you to set text alerts to notify you when your bank account reaches a certain balance. This keeps you mindful and aware of exactly how much money you have left and lets you tailor your spending before it’s too late.
- Look into alternative banks. Some banks will not charge you for going overdrawn. Whilst most of the major high street banks might charge for overdraft fees, there are some mobile banks that do not. Look into switching your account.
- Live by your budget. If you have an app where you put in every transaction you make, then you are always aware of how much money you have left to spend in your bank.
Monthly account fee
Lots of banks charge you money just for the joy of having an account with them. Some banks will offer you extra services for a monthly fee, including phone or travel insurance, or car breakdown cover. Take your time to look through them and measure up the costs to decide if you wish you pay a monthly fee or not.
Some good ways to avoid monthly account fees:
- Do your research and switch to a bank that doesn’t charge you for your account. Again, many mobile banks waive these charges, so take a look at what is being offered online.
Depending on your bank, you may be charged ATM fees for withdrawing from a machine not supported by your bank. These charges can vary from a percentage of the amount withdrawn, to a flat rate of sometimes as much as £5. Similarly, many banks will also charge you money to withdraw cash from a foreign ATM, which can seriously ruin a holiday.
Some good ways to avoid ATM fees:
- Switch banks. Lots of banks allow free withdrawals from other bank ATM’s, you just need to read up and be aware of which banks allow what.
- See if your bank offers any special arrangements for overseas withdrawal costs and get in contact with your local branch for more information.
If you want more tips on how to make savings in your everyday life, check out our post, 10 Everyday Savings Tips.