I’ve Paid For This Twice Already…

Frugal living and debt reduction tips for a better financial future. This is one family’s story.

August 29th, 2007

Eliminating Fees – Don’t incur them to begin with!

No Credit Needed is running a 33 day series on 33 Days And 33 Ways To Save Money And Reduce Debt. The first topic, posted today, is about eliminating fees. I thought I’d chime in with my advice about eliminating fees – know all the facts about your accounts so you don’t incur them. Especially if your bank or credit card or other account gets bought by a new lender/institution.

A few months back, I had a $3 charge on my savings account at the end of the month. I have a savings account at my local brick and mortar institution connected to my checking account at the same location that has a low minimum balance to avoid monthly fees. I knew my balance had been well above that the whole month, so I was confused and started delving deeper into my savings account agreement through the online documentation. When I had first opened the account 7 years ago, I had read all the accompanying documentation and was aware of what fees may be involved for certain actions. But about 2 years later, my bank was bought by another larger bank, and I got a new customer agreement that I barely skimmed other than to see what the minimum balance was and what fee was associated with being under it. Big mistake. Just because the minimum balance fee was the only one in my old agreement that I thought might apply to me at some point didn’t mean the new agreement might have different terms I needed to be cognizant of and adhere to.

Now, after incurring this $3 mystery fee, reading the online customer agreement, I found out that I was only allowed 3 free withdrawals from my savings per month, and every one after that incurred a $3 fee. I don’t often withdraw from that account more than once a month, so I hadn’t gone over the limit before, but this particular month I had been setting up my ING account and transferring money out of my savings to my checking for various subaccounts and had gone over the maximum free withdrawals by one. Oops!

Since my brick and mortar savings bank account earns paltry interest (about 0.25% at last reckoning), that $3 had just wiped out any interest we had earned maybe… ever. We use the account for short term savings (like annual bills etc) so the interest rate didn’t bother me vs availability of funds. But… oops! If I had just been aware of the withdrawal limit (and I take full responsibility for not being aware) I could have structured my withdrawals more efficiently and never paid that $3 fee.

Be aware of *all* possible fees! You can save money easily by just not spending it in the first place. :) I’ve made a promise to myself to never pay another unnecessary fee.

~J

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6 Responses to “Eliminating Fees – Don’t incur them to begin with!”

  1. The same thing happened to me, or I stupidly let it happen. I thought I was being smart by setting up overdraft protection to save on overdraft fees but I ended up losing $100 to Wells Fargo after they withdrew too many (I think five?) from my overdraft protection. UGH!!!

  2. Ugh! That stinks. I hate when lessons learned have to be so expensive. :(

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