Your Bank Fees Are Increasing - Here's Why

Image via WikipediaIt’s time to add free checking to the endangered species list. No-cost access to your own money may soon go the way of the passenger pigeon. But this extinction can’t be blamed on global climate change or habitat loss. Blame the shaky status of free checking on regulatory climate change and profit loss for banks.

Recently enacted federal banking regulations restrict previously profitable practices by banks such as big overdraft fees and jacking up credit card interest rates for customers who are late on a payment. And earlier this summer, efforts by the banking industry to block a cap on debit card swipe fees failed. The fees banks charge grocery stores, restaurants, big box stores and other businesses every time they swipe a customer’s debit card will drop from about 45 cents a swipe to 12 cent swipes. That change, set to go into effect on Oct. 1, adds up to a loss of revenue of billions of dollars for the nation’s banks.

The Banks’ Loss Is Your Loss. 

The banks need to make up that loss of revenue somewhere and many banks have plans to recover it up by hitting you with new fees: checking account maintenance fees, ATM fees, debit card use fees.

Fight Back!

With a little due diligence, you can keep money in the bank without paying money to the bank. Most bank customers — 71 percent — find ways to avoid paying any bank fees, according to a survey by the American Bankers Association (ABA) released Sept. 1. The survey also shows that 82 percent of consumers spend $3 or less in monthly bank fees for services such as checking account maintenance and ATM access.

"It's impressive that so many customers avoid paying any bank fees," said Nessa Feddis, ABA vice president. "It shows that consumers are savvy and able to navigate the new banking landscape with skill. Often, avoiding bank fees can be as simple as maintaining a minimum balance or accepting a paycheck by direct deposit.”

But … the annual survey of 2,000 adults was conducted in mid-August. Many of the new fees announced by some big banks don’t kick in until fall. For example, SunTrust, a major player in the South, will begin imposing $5-a-month charge for debit card use in November. Regions Bank will impose a $4-a-month fee for debit-card use starting Oct. 1. Wells Fargo — a large national bank — will begin charging a monthly $3 fee for debit cards in October for purchases in Georgia, New Mexico, Nevada, Oregon and Washington.

More Fees Coming

Banks have an assortment of other tactics to get some of your money — charging for a paper monthly statement or receiving a wire transfer. Another example, Bank of America charges a $3 fee if you make more than three transfers a month from your savings account to your checking account. It pays to read the fine print when opening your checking account and asking questions about fees.

What To Do

Getting a deal on bank fees — like finding a deal at the mall — requires a bit of legwork. Online banks still offer free checking and if virtual banking fits you, that is an option. Moving your account to a credit union is another option. Credit unions are nonprofit and typically offer better deals on checking accounts, consumer loans and interest rates on deposits. 

Some resources that might prove helpful when looking for another bank include MyBankTracker.com, Bankrate.com, FindABetterBank.com and FindACreditUnion.com.

You may also avoid bank fees by giving your present bank more business. Many banks offer better deals to customers who maintain a higher checking account and/or savings account balance. You may also get the bank to waive fees if you have an automobile loan or home mortgage at the bank.

Should I buy the iphone 4S or wait till next year for the iphone 5

Image by Witer via FlickrThe iPhone 4S came out on Friday are you going buy one? Already millions have been sold. The market for Apple products seems unlimited. But is it really smart to keep buying a new iPhone every year.

Some people with older iPhones have been waiting for this new release to upgrade. If you have the original iPhone or the 3g or 3gs it makes sense to upgrade. Your phone is at least 2 years old and probably starting to slow down. Apple upgrades its OS fairly regularly and the upgraded software is getting more advanced and is having a problem running on the older hardware. This planned obsolescence forces you to upgrade just to get a phone that runs correctly.

Should I upgrade if I have an iPhone 4?

The iPhone 4 is almost identical in looks and function. The only difference is that it has the new voice recognition software and a better camera. If you have an iPhone 4, the benefits of the new phone aren't reason enough to upgrade. The new iPhone is really aimed at the people who have an iPhone 3 or 3G. They need to upgrade. Still have iPhone envy, according to Apple's track record, The new iPhone 5 should be released next summer.

I want a new iPhone but I am short of money.

If you are short of cash and still want to own an iPhone, AT&T is selling the iPhone 4 for $99 with a two year contract. Want it even cheaper, the iPhone 3gs is free with a new two year contract.

Why You CAN Afford That Overseas Vacation

Image by Kenzoka via FlickrThe worldwide economy is in a state of flux right now, and while this might not therefore seem like the ideal time to take a trip overseas, you can easily make such a trip more affordable by eliminating avoidable costs that can add up to 15% of your trip’s budget. No, I’m not about to start lecturing you on the importance of shopping around to find the cheapest airfare or waxing poetic about backpacking and staying in hostels. Rather, I have a few perhaps less obvious tips that can help you minimize the cost of any trip out of the country. After all, whether you’ve done the miraculous and retired early or simply want to see the world with your kids, grandkids or significant other, we all deserve a vacation from time to time and everyone loves saving money.

Choose your credit card wisely

As you likely know, Visa and MasterCard are the largest card networks in the world and the only ones that are accepted anywhere plastic can be used. What you might not know is that Visa and MasterCard also offer some of the lowest exchange rates possible. According to a Card Hub study, a MasterCard or Visa card can, in fact, save you 14.7% on currency exchange relative to cash converted at an airport kiosk and 7.9% as compared to cash conversions made at a local bank. Still, you cannot simply use whatever Visa or MasterCard card happens to be in your wallet and expect to save that much. Card Hub data shows that over 90% of all credit cards have foreign transaction fees, which are typically 2-3% of any purchase that is processed abroad, no matter where you may physically be located when you make it. You therefore need to get a no foreign transaction fee credit card, not just before you depart on your voyage, but even before booking any flights, hotels or activities.

Plan how you will access cash

Though I recommend using a credit card for the majority of the purchases you make while abroad, given how easy it will be to carry around as well as the piece of mind that comes with knowing you won’t be held liable for unauthorized purchases, you’ll still need cash for some things. You have two primary options for getting your hands on some foreign currency: opening a low-foreign-fee debit card or exchanging cash at a bank before leaving. The debit card course of action would allow you to garner the low Visa/MasterCard exchange rate and simply withdraw cash from overseas ATMs as needed. Exchanging cash at a local bank will result in more money being lost in translation and will force you to travel with all the cash you plan to use on your entire trip. Ultimately, your decision will rest on the debit card offers and cash currency exchange deals you can find.

Say goodbye to your issuer

Before leaving, there are some logistics to take care of in order to “activate” your credit card and/or debit card for international use. If you do not notify your issuer(s) about the dates and destinations of your travel plans, your card(s) will likely be suspended due to fraud suspicions. What’s more, it’s a good idea to get your bank’s international toll-free number so that you have a means of requesting a new card if your original gets misplaced or stolen.

Beware dynamic currency conversion

Finally, once you reach your destination, only pay for things in the local currency. While this might seem like rather obvious advice for cash purchases, when it comes to plastic, merchants may offer to convert your purchase totals to U.S. dollars. On the surface, this might seem like a rare act of kindness, but many merchants use unfavorable exchange rates (up to 10% higher than those offered by Visa and MasterCard) when converting your totals in order to pad their pockets. This is just the kind of extraneous cost that can really add up over the course of a trip, so you’d be best served making sure to only sign receipts expressed in the local currency.


Hopefully, these tips will both help bring your long-anticipated overseas adventure to fruition despite this shaky economic climate and eliminate any surprises on your post-trip credit card statement. After all, your concern should be exactly how much fun you’re going to have, not how much it’s going to cost!

5 Rules When Loaning Money To A Friend

Image via WikipediaBorrowing money from a friend is the fastest way to ruin a relationship. The borrower usually has tried every other source for credit. Their credit cards are maxed out. The house is mortgaged fully and lines of credit are closed. The party may have lost their job or an emergency has happened. By the time they get to you the situation is desperate.

In this time of recession who doesn't know someone or a family who is having very hard times. They were unprepared and life hit them broadside. You want to help because your friend is in need. But should you? Will they be able to pay you back. 

They probably will, but be prepared to lose the money. Through their own fault or fate they are showing their lack of financial knowledge. The mistakes they made could possibly be made again with your money. If you must make a personal loan why not take a few precautions and do it right.

1. Consider alternatives

Borrowers who fail to repay bank loans may face legal problems, but those who can’t make good on loans to friends or family can be hit not only with legal trouble but also the loss of a personal relationship. That’s why it’s a good idea to think about all your options before approaching someone you’re close to for a loan. Consider trying more than one bank, for example, or exploring borrowing possibilities at credit unions or other sources. It may also be possible to cut back on your spending instead of taking a loan or to postpone your plans for a big purchase until you have saved the money you need.

2. Get it in writing

One of the potential pitfalls of a loan between friends or family is their informality. A handshake is a popular way to cement a deal, but a written document is a better idea for both sides. That’s because problems can arise when the friend lending the money expects it to be returned within a short time, while the borrower believes he or she can pay it back over an indefinite period. When lending money to a loved one, it’s often hard to insist on knowing when the loan will be paid or to ask for regular payments. 

To protect your relationship and your wallet, it’s best to put it in writing. Write down the amount of the loan, when and how it will be paid off and if the borrower will pay any interest. This kind of promissory note clarifies the borrower’s responsibilities and can help prevent misunderstandings later. The note should be signed by both borrower and lender, and each one should keep a copy.

3. Be realistic

While written documentation is a great idea, remember that it will not prevent potential payment problems. That’s why it’s important for both people to be realistic before they enter into the deal. If you know that a loved one likely won’t be able to repay you, for example, offer instead to help him or her solve problems by developing a monthly budget or working out a payment plan with creditors. 

If you are uncertain you will be able to repay a loan, consider asking loved ones to brainstorm other borrowing options. Doing so may preserve your relationship so that it is still in force long after any money problems are over.

4. Give honest updates

If you borrow money from a friend or family member and find that you are unable to repay it as expected, let them know about the problem right away. Explain what went wrong and when you do think you’ll be able to make good. It may be a difficult conversation, but your candor and consideration for the other person will go a long way in helping to preserve the relationship.

5. Give the money as a gift.

Personal loan are notorious for not being repaided. If you have the means, offer them the money as a gift. If not the full amount, a percentage of the amount needed. Doing this heads off a possible confrontation or uncomfortable situation that could come down the line. It's better to keep the friend and lose the money instead of the reverse.