Bank fees are another area that can throw you into a delinquency pretty fast. Unlike days ago when banks were glad to have your business and considered it part of doing business to serve you, now you'll be charged for a lot of the business you do with your bank.
You can be charged maintenance fees simply for having a checking or savings account with that bank. You can be charged if there's no activity on that account.
A lot of banks are charging customers usage fees to speak with a bank teller and they're also charging monthly fees if you go into the branch and have a teller transact your business versus you doing it yourself through online banking.
Some banks charge you for getting a monthly bank statement or for pulling out money from your checking or saving account if you go over their limited withdrawal guidelines.
But that's not the only way that banking can throw your finances into delinquency and this can be a high cost delinquency too.
What many banks are doing are hitting customers with extremely high overdraft fees even if the actual cost of the purchase was a few dollars. You can incur fees as high as $35 per overdraft.
So say you spent $350 when you had $349 in your account.
Your bank can charge you the $35 fee. Then on top of that, they can add more charges the longer your account is in delinquency.
And something that a lot of people who do have overdraft protection don't know about banking is that if three items come in at the same time for costs of $30, $30 and $10, the bank will pay the two $30 transactions first so that you get that delinquent fee.
Then they'll pay the second item so that you get another delinquent fee rather than paying two of the costs so that you only end up with one fee.
The reason they do this is because banking is a business and they're in it to make money, not to save you money.
If your bank seems to be milking you for every available charge that they can, it's time to look elsewhere.
Another way that banks can contribute to creating delinquent debt for you is by charging you high fees to use their debit card.
Some banks charge a monthly fee just for you to have their card and use it.
You can end up with overdraft fees by using the ATM.
It's easy to not realize that the ATM you used charged a $2.50 withdrawal fee instead of the $1.75 you were used to paying.
Being off by that small .75 cent difference can overcharge your account and the bank will take their big overdraft fee.
Something else the bank does was brought to our attention by the Consumer Financial Protection Bureau.
In this study, it was shown that when someone overdraws a debit card by making a purchase, the bank fees are often substantially higher than the purchase.
Banks are routinely pocketing just under $1,000 in debit card overdraft fees per overdrawn account each year. That's a lot of money that banks are taking from you when you add it all up.
You can fight back by first not doing business at a bank that charges you a debit card fee just so that you can have their card. You're doing them a service by banking with them in the first place with your money.
Also, if you've been with your bank for a while and you don't have a history of overdrafts, some banks do offer a one time fee waive for overdrafts. It's worth at least asking if they do this.
Some banks, if you have multiple fees, won't waive them all, but they might be willing to waive half of them.
What you have to do is actually go into the branch and speak with the customer service representative.
If the representative isn't willing to work with you, go to another branch of your bank and ask for the branch manager right away. They do have the authority to make a concession for you.
Next, look for banks that will give you overdraft loan coverage rather than overdraft fee coverage. With the loan coverage, the bank will pay the amount over what you have in your account and won't charge you a fee.
You'll end up paying only the interest charged on the loan, which is a lot less than the standard overdraft fee.
If you're in any kind of delinquency with your bank and you're getting hit with these big fees, you have to do whatever you can to stop that.
Bring your account current as soon as you can because the total percentage rate you're getting hit with from your bank can be astronomical.
Even if you have to borrow the money from a friend or relative to get current with, it's worth it for the amount of fees you'll save.
Learn more here in my section explaining all about loans and credit cards guide to help you get rid of debt and prevent further financial crisis.
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