It may not come as a surprise that banks thrive off of fees, but I saw something interesting last week while logging into my Chase account. They had a little animated window pop up with 5 tips to help you avoid checking account fees. Hey, how nice of them. They are looking out for me and making sure I don’t pay any unnecessary fees.
Well, let’s not get ahead of ourselves. The suggestions they offer are pretty much common sense as you’ll see below. While it’s still a good idea to reinforce the basics, they should have gone a little bit further in explaining what triggers fees and how customers can avoid them. Heck, I figured this would be a perfect marketing opportunity for Chase where they could talk about different account types, adding a savings account to a checking, or a number of other things that can be used to not only eliminate fees for the customer, but also attract more business and bring in assets. Instead, they left it with just these five simple tips.
1. Make Sure the Money’s There
No, really? I guess some people could use the reminder to only spend money that you have in your account, but this is a no-brainer. Make sure there’s enough money in your account to cover any purchase you’re looking to make. Overdraft fees can be expensive and it’s a real pain if you’re only overdrawn by a dollar and get stuck with a $50 overdraft fee. So, be smart and make sure you know how much money you have before spending it.
2. Record All Transactions
This probably goes without saying as well, but you really need to keep track of your transactions. If you do, you’ll also always know how much money you have in your account so that you can avoid making the mistake of point number 1. This is really important if you have a joint account with someone. You may have had a situation like this before where your spouse or partner withdrew some money from the ATM or wrote a check for something and didn’t let you know or record the transaction. So as far as you know the money is there, but then once that check clears or the purchase is made you find your account overdrawn. Make sure you’re both on the same page and recording transactions. Not only does this help keep you from making mistakes with the account, but recording your transactions will help you track spending and maintain your budget. When you see where all of the money is going you can better understand your own spending habits so you can make better financial decisions.
3. Check Your Balance
I’m not sure why this wasn’t part of point number 1 since it’s ultimately the same thing. If you check your balance, you know how much money you have to spend, and should be able to avoid going over the limit. Checking your balance is so easy these days. With online banking, telephone banking, and even mobile banking, your balance is at your fingertips 24 hours a day.
4. Leave Room for Mistakes
This one might not be as obvious, but it’s a good point. You should always leave a little cushion in your checking account. If you regularly check your balance and record all of your transactions, you should be fine. But mistakes do happen. If you use a debit card the merchant might charge you twice, or there could be a delay before the transaction goes through, or it could even be as simple as a bank computer error. While these aren’t all that common and might not even be your fault, save yourself the trouble and make sure you have a cushion. If you’re running your checking account down to the last penny each week until payday you’re running the risk of a simple mistake proving costly.
5. Don’t Stay Overdrawn
Again, really? Overdrawing your account is bad enough, but if you leave the account overdrawn you have to realize that can’t be a good thing. I don’t know what else to say about this one, but if you do become overdrawn, just make sure you do whatever you can to rectify it as soon as possible because the fees for this activity can be devastating. Also, if this occurs and it’s a freak accident for you and you’ve otherwise kept perfectly clean accounts, be sure to go talk to your banker or branch manager. If you have a good account history with them you can usually negotiate all or most of the fees away. But the bottom line is that you really shouldn’t leave your account overdrawn, it’s as simple as that.
Some Real Tips to Help You Avoid Bank Fees
Ok, so those 5 tips from Chase are pretty basic and most people will already be doing these things, so how else can you save money on banking fees? First, make sure you’re on top of the latest account features and promotions that your bank offers. Most banks will have a basic free checking option, but there are also ways you can waive checking account fees by maintaining a certain balance in the account, by opening and linking a savings account, or even just setting up direct deposit. Banks are always changing their accounts and fee thresholds so if it’s been a while since you’ve looked at your account it’s time to stop into your local branch and see what they can do for you. Remember, you are their customer and they want your business, so a good bank will do what they can to keep your account.
If there is nothing they can do for you or no way to eliminate the fees without adding on unnecessary services, then you might consider a credit union. These local institutions are non-profit and typically carry far fewer fees and restrictions on their accounts. While you still probably won’t be able to become overdrawn or stay overdrawn on your account and not incur any fees, you should be able to find a checking/savings solution that meets your needs without as many fees.
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About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.