Personal Finance Advice

Financial institutions make a lot of money from charging fees to their customers.  Some of these fees are justified while some of them are relatively ridiculous and designed solely to generate more income for the financial institution.  Either way, you should avoid fees as much as you can because they usually do nothing but cost you money without anything in return.

Banks and credit unions charge fees whenever your account gets overdrawn, but if it’s your fault that the account is overdrawn then it’s a fee that makes sense.  On the other hand, there are some fees that don’t make a lot of sense:

Monthly service fees

Customer service fees

Balance inquiry fees

A fee is justified if you have cost the financial institution money by doing something out of the ordinary.  If you need to request two years worth of printed bank statements then you can’t get upset when the bank wants to charge you a nominal fee for their trouble.  If you simply want to check your balance by calling a customer service representative, however, you shouldn’t have to pay a fee.

Credit card companies charge fees in a similar way.  If you send in a payment late you’ll get a fee charged to your account, but this makes sense because you’re deviating from the original agreement that you would pay in a timely manner.  If you get charged a fee every month just for the sheer honor of having the card, though, then it doesn’t make much sense at all.

What happens when you encounter a fee that you don’t think is fair? Contact your financial institution.   Chances are you received a Schedule of Fees when you first opened the account or obtained the credit card, so you can’t really say that you weren’t aware that you would encounter the fee you received.  What you can do is to talk to a customer service representative or manager and ask that the fee is waived.  Financial institutions waive fees all the time, especially for customers who don’t often do things to get fees charged to the account.

What should you do if your financial institution won’t waive the fees and charges fees incessantly? Switch financial institutions.  There are simply too many banks, credit unions, and credit card companies that offer accounts devoid of excessive fees for you to justify sticking with a financial institution that charges you fees for every little thing.

The exception to this is for consumers with horrible credit scores.  Oftentimes the only accounts they can get approved for are accounts that are riddled with fees.  People in this situation should do their best to raise their credit score and then switch to accounts with fewer fees after they have improved their credit scores substantially.

Are you mad about fees? You should be…fees take away your hard earned money.  Don’t allow your financial institution to take your money and give you nothing in return.