Anyone who has had the pleasure of owning a bank account knows that it is not always a fun experience. One big pain is the understanding of your bank’s special charges and under which circumstances they may be levied against you. The basic principle behind bank charges is simple.
It is the way for banks to charge you for all of the extra services that you may or may not be aware that you are receiving. These can unfortunately be quick unfair for some consumers as bank charges can be very difficult or impossible to reverse except under the most extreme of circumstances. This means that an innocent error can compound into charge after charge until the user is losing significant sums of money.
To better understand bank charges, we should look at the many circumstances under which they may be levied against a user. One well known instance is the instance of an overdraft. An authorized overdraft is sometimes exempt from bank charges. In this instance the user just has to set up a temporary borrowing plan with their bank which will let them be slightly in the red for short periods of time without getting nailed with large charges.
The unauthorized overdraft is the one that almost always harms the user’s bankbook. If you slip one number and end up 10 dollars in the red through writing a check, you can soon face large overdraft fees established by your bank alongside high interest charges that they will access.
The worst thing that a bank user can do is assume that many of their banks “services” are free. It is not unlikely for some banks to levy bank charges for relatively small errors. These include problems as simple as just using your ATM card more than your contract allows in a year or using more check books than you were allocated for the full year. One very serious problem is if you are forced to use an ATM from another bank.
In this case you will probably be charged fees by both banks. These can build into substantial sums quite quickly. These are really just normal services that many people would assume were just part of any package. Unfortunately, this isn’t much of a defense when talking to a representative. Ignorance isn’t always bliss.
The best way that you can possibly defend against unexpected bank charges is to fully look through all of the papers and contracts describing every service for your account. Reading the fine print can really pay off in money saved through careful banking.
If you want to have a bank account then you need to understand the many charges that banks can levy. Just remember that there is no free lunch anywhere. Your bank is not your enemy, but it isn’t going to be your best friend either. They have little incentive to not charge a fee when they do you any favors that they don’t have to do.
Read everything that they give you and read everything that you sign. Be aware of the charges that your bank can levy and manage your finances accordingly.