Bank Customers Beware

Do you feel as though the less in-person contact you have with your bank, the more costly it is becoming to keep your money there? If so, you're right: Banks are saddling customers with more monthly fees than ever, reports the National Public Interest Research Group, and this trend is only on the rise. But before you shell out a cool $190 this year on checking-account charges-the average per customer, nationwide-read these tips on how to avoid them.

• Start by studying your monthly bank statement. It may seem like a no-brainer, but countless Americans don't take the time to familiarize themselves with the gamut of additional charges out there, such as ATM fees ($1-$1.50), check-writing fees, monthly service charges ($3-$12), NSF (non-sufficient fund) fees ($25-$30 per check), ATM replacement card fees, and the rather sneaky "currency conversion" fee, which (in New York State, for example) adds 2 percent to each debit transaction made overseas, in addition to a $1.50-$5 surcharge. And while you're looking at your statement, watch out for errors.
  
• Compare the deal you're getting. To learn how your bank's charges stack up, contact your state's PIRG or visit Web sites such as www.bankrate.com that publish semi-annual checking reports as well as post top deals across the country. If your bank's fees are considerably higher than other banks', it may be time to take your business elsewhere.
  
• Shop for bargains. You can still find good deals if you are willing to do some digging. Although free-checking accounts are now scarce, they aren't impossible to come by, and are more readily available to customers who do all their business with one bank or who establish direct-deposit with that bank. "Because interest rates are so low right now, non-interest bearing checking accounts are the wiser way to go right now," says Daniel Ray, Editor of bankrate.com. These accounts generally have fewer requirements and lower monthly service fees, averaging $6.21 opposed to $10.77 on interest-paying accounts.
  
• Know your own banking habits. If you frequent ATM machines like they're going out of style, seek out a larger institution with branches on practically every corner to avoid incurring massive "outside-the-system" ATM fees, but be aware of the downside-you may have to pay more for the convenience. Or if you have yet to shake a bad checking-bouncing habit, invest in overdraft protection to eliminate steep, and numerous, NSF fees. Better yet, look for banks that offer "linked relationships" with checking and saving accounts, which allow you to draw into your savings to cover the check floats and overdraft.
  
• Consider a credit union. Credit unions may present fewer options, such as smaller ATM networks, but what they do offer is generally a better deal than at banks. They have lower service fees (if any) on checking accounts and lower required minimum balances. Contact Credit Union National Association at www.cuna.org to find out if you qualify to join one of these member-owned institutions. In some instances, it boils down to location: Residents of Los Angeles County, California's East Bay Area, and the Florida Keys automatically qualify.
• Bank Online. Join over 12 million who'd rather go on-line than stand in one. According to the March 2001 bankrate.com semi-annual pricing study, despite their dip in average yields, internet accounts are still offering better checking deals, with lower monthly service charges and NSF fees. 46 percent of online accounts don't have any service charges at all, reports bankrate.com, versus 7.1% of those offline. One of its favorites: Presidential Online Bank (880-383-6266), with a 6% interest-earning yield and monthly fees and NSF averaging $5 and $15 respectively. How is this possible? Online banks can afford to make money on the spread, as they don't have the same number of tellers, employees, and overhead as the physical commercial giants. Plus, if you pay your bills online, you'll save on stamps and save as much as $25 for a box of checks.

Once you've found the bank that best suits your needs, it's time to fire your banker. Steer clear of any headaches that may ensue from navigating this transition by opening your new account before closing the old one (even if it is a strain to maintain minimum balances on both). Also, switch your direct-deposit to your new account at least one month prior to using it to pay bills, and temporarily halt all automatic debit payments (such as mortgages or car loans) until the changeover is completed. Finally, save all your records of both accounts during this time period, and watch carefully for fees and penalties. Request that your new bank eliminate any fees that may have resulted from this transition; most likely, it will want please its new customer.

ATM Fees are Money Machines-for the Banks
Bankrate.com estimates that Americans will drop a whopping $2.2 billion in ATM charges this year. What many of us fail to recognize is that, when we swipe our cards carelessly through one of those dinky cash dispensers at a local convenient store, our own banks, as well the ATM dispensing the cash, are charging as much as $2.00 per transaction. How can you cut back on these fees? Limit your ATM visits to those machines in your bank's own network, and withdraw larger amounts each time to avoid limited transaction fees (such as Chase's $1 fee for every transaction in excess of 40 transactions per month.) Also, when you pay with your ATM card at "point of sale" locations, ask for cash back; it's a free service. Be on the lookout for free ATMs in your neighborhood, as credit unions and smaller banks form "no surcharge" alliances. The Co-op Network (www.coopnetwork.org/public/find_atm/index.cfm) is a fine resource.