Bogus bank fees happen to all of us, even me. Last weekend, as the polish on my impromptu $12 manicure dried, I learned the nail salon only took cash. Because I hadn't planned on spending money at all, and rarely carry cash as it is, the kind esthetician let me run next door to the convenience store. There, from a very sketchy machine buried in the back, I reluctantly agreed to a $2.50 service fee. My own bank billed me $1.50 more. Do the math: It cost $4 for that twenty, a massive 20% mark-up, and my bargain manicure actually cost $16 (plus tip). Also, I smudged it on the way home.
According to Toronto personal finance expert Rubina Ahmed-Haq, this is just expensive laziness. “Everything is so accessible now, with online banking and machines everywhere, that there's really no reason you should have to access money at that mark-up,” she says. If I did so twice a week, every week for a year, I'd pay $384 in needless fees. That's a lot of incentive to visit my own bank.
And now that you're there, take a closer look at your accounts. When it comes to your plastic, there are many other fees – late charges, overdraft fees, service fees –that often pop up (sometimes without you even noticing!). Small fees are easily ignored and often feel not worth the bother to dispute, but getting in the habit of paying attention and being assertive can save you lots of cash in the long run.
Another example: While I was out getting pampered, I should have been home checking my credit card's due date. Pay on the Sunday, as I did, and it won't go through till Monday– resulting in, you guessed it, a $50 interest charge.
Ditto for an overdraft fee, which you might easily slip into if you're not watching carefully. “Firstly, don't spend money you don't have. But if you need to pay a bill, if the late fee is big too, then access a line of credit with a lower interest rate,” says Ahmed-Haq.
That said, nobody's perfect – even experts. “I accidentally paid my card a day late and had to pay interest on the whole amount. I was really annoyed.” No need to sit home and stew though. “If you have a good credit history, you can absolutely call and dispute the fee,” she says. By all means, call your bank and explain. “Even if you're at fault, a bank will certainly hear you out and try to keep you happy.”
The bank is a business, remember, and they're trying to balance making money with keeping their clients. And since competition is fierce, there's no reason you should be paying a monthly service fee. New Canadian legislation says banks must offer a no-fee option, but it's your job to make sure you get that option.
“If you're being charged just to have a normal savings or checking account, you need to walk into your bank and ask for no-fee banking. If they can't give you that, then go find a bank who can,” says Ahmed-Haq (as soon as you mention switching, notice your options multiply exponentially).
Do as I did and make a phone call. That $50 interest charge, gone the moment I politely asked for it, and I've added an alert to remind me next month not to be late. That's a fee I can skip, like many others, if I only plan a little better.