SALT LAKE CITY – If you pay more than zero dollars for bank charges, experts are warning you that you’ve already paid too much. This, as a new study finds that banks earn more from these fees than they pay their customers in interest. But as KSL investigators found out, bank charges are avoidable.
the MagnifyMoney Study painted a greedy picture of banks: “Banks have collected $ 114 billion more in fees than they have paid interest in over the past decade.”
The man who conducted the research said it wasn’t so grim because the fees are completely under our control.
“Consumers should be standing up,” said Ken Tumin, founder of DepositAccounts, a bank account comparison website.
Tumin said he hopes his research will serve as a wake-up call to consumers paying bank fees when they really don’t have to.
Banks make a lot of money on fees their customers pay, like bad checks, continuing to receive paper statements, or in some cases even just for the privilege of having an account.
Average bank charges per deposit account are $ 60.75, which has totaled nearly $ 350 billion for banks over the past decade.
“You absolutely want to avoid these charges,” Tumin warned.
Howard Headlee, president of the Utah Bankers Association, gave his opinion on the Tumin study.
the KSL investigators asked him if this makes the banks greedy.
“Yes, but if you look at the numbers, you’ll see that the fees have been incredibly stable over the past ten years,” Headlee replied.
That is true. In fact, fees actually went down a bit in 2020, with banks slashing customers a bit during the pandemic. Still, Headlee agreed: bank customers should be able to avoid paying bank charges.
“If you are paying a fee, you are doing something wrong, and you have to recognize it and work with your bank,” Headlee said. “Say, ‘What do you want me to do? What product is there for me that can help me avoid these charges? They will tell you.
If all else fails, here’s a tip you might be surprised to hear from a man who speaks for banks: don’t be afraid to fire your bank and turn your business over to the bank of in front.
“Listen to the charges. Respond to charges. Find something that works for you, ”Headlee advised.
An important note about fees: Banks say they don’t need them to keep the doors open. The lion’s share of their money is made on loans.
The banks argue that the charges are a good thing because they only punish the person who incurred the charges for doing something wrong. For example, if I depleted my account – it costs the bank money, and if the bank refused to slap me with the fees, that means all the banks out there would end up having to pay for it.
The American Bankers Association has some tips on how you can avoid fees.
The big deal here is simply not spending more money than you have. The ABA said that tracking account transactions and balances will help you avoid sending your account into negative territory and then paying overdraft fees. It is always a good idea to keep a reserve of money in your account to avoid accidental overdrafts.
Other tips include using only your bank’s ATMs or those affiliated with your bank, as well as signing up for an automatic SMS alert when your balance drops below a certain amount.