Reduce Bank and Credit Card Fees

By Elizabeth Ody, Associate Editor

From Kiplinger's Personal Finance magazine, July 2008

When Ilana Matfis moved from Sharon, Mass., to San Francisco, she figured that ordering new checks from Bank of America would be a snap. But when the new set arrived "they'd spelled San Francisco wrong," recalls Matfis, 25.

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After misspelling Matfis's name on the second order of checks, the bank finally got it right -- then sent her a tab for all three sets. "The charges were only about $10 each time, but I had to dispute them on principle," says Matfis. A customer-service representative in San Francisco refused to issue a refund. So she called her branch back in Sharon, where an employee remembered ordering the first batch of checks and agreed to remove all the charges.

There's little hope of restitution for some fees, such as the $3 to $5 you'll pay to withdraw cash from an out-of-network ATM, so it pays not to stray. Or open an account with a bank that reimburses ATM fees.

McBride says that as long as your account isn't paying interest, you should be able to qualify for free checking. If your bank balks, head elsewhere.

Also worth the haggle are fees for receiving canceled checks with your monthly statement (up to $3); getting a replacement ATM card ($5); making too many monthly transfers (up to $10); or using a live representative instead of the phone tree (up to $2).

The best way to avoid the dreaded insufficient-funds fee -- which averages $28 for the first overdraft or bounced check and may increase as offenses pile up -- is to balance your account regularly. As an alternative, link your checking account to a savings account so that overdrafts are covered by your own funds. Expect to pay $5 to $10 for triggering the service, but you'll avoid interest charges on an overdraft line of credit.

The success rate for challenging credit-card fees is higher than with bank-account fees. Even supposedly nonnegotiable charges, such as late-payment fees, aren't set in stone. "If you're a good customer, you can probably get late fees removed once a year," says Bill Hardekopf, of Lowcards.com. The tardy payment may still tarnish your credit score, but you'll be as much as $39 richer.

Other fees worth a phone call: the 3% many card issuers charge to transfer a balance; the fee of up to $5 for a duplicate copy of a bill; and the fee of as much as $25 to rush you a replacement card.

Companies have to notify you when they add a new fee, but "it might come in a white envelope that looks like junk mail," says Hardekopf. Sign up for electronic delivery to stay on top of sneaky maneuvers.

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