5 Ways To Beat New Bank Fees

Ask your bank for a better deal--or go someplace else.

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If you thought your bank was your friend, chances are you're now learning otherwise.

With profits down and new rules limiting the ways they can make money, many of the nation's biggest banks are rolling out new fees for activities that many consumers are used to getting for free. Bank of America plans to start charging a $5 monthly fee for the use of debit cards in stores, while Wells Fargo, Chase, Regions Financial and SunTrust are testing smaller debit card fees. Many banks no longer offer free checking accounts. Meanwhile, other new fees for ATM use, getting paper statements, writing too many checks, and even using a teller are starting to pop up.

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It's no coincidence that Bank of America, which has lost about $6 billion so far this year and is still reeling from bad lending decisions made during the housing bubble, is rolling out some of the steepest new fees. But bank customers aren't as captive to new fees as they might think. Not all banks plan to nickel-and-dime their customers, and carefully organizing your money provides advantages. Here are 5 ways to reduce some of the new fees banks want you to pay, or evade them altogether.

Know your bank's rules. There are many caveats to the various fees that banks charge, and if you follow the rules you'll get the best deal. The new B of A debit card fee, for example, will be assessed on customers who use their card in stores and whose combined account balances fall below $20,000. But if you only use your debit card for ATM withdrawals, there will be no fee, no matter what your balance. So if you withdraw cash from a Bank of America ATM and use that to shop, instead of swiping your debit card at the retailer, you'll avoid the $5 monthly fee. Many banks have also started charging a monthly fee for checking accounts that used to be free. But they'll waive the fee for accounts above a certain minimum balance.

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Banks usually calculate those minimums by adding up the balances for all the accounts you have, so it pays to consolidate your checking, saving and brokerage accounts at one bank. Other fees kick in only after you've written a certain number of checks or made a fixed number of ATM withdrawals. These rules can be somewhat arbitrary and they can change without warning, so customers should ask for a copy of their bank's fee schedule, which banks are required to provide. Note all the fine print and rearrange your accounts if it will work to your advantage. And pay attention to those legalistic disclaimer notices that arrive in the mail. They might bear news of new fees, and how to avoid them.

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Complain. Many banks note that they're "testing" new fees, which means they'll be likely to rescind them if there's a backlash. And banks can remove fees at will for customers who are insistent. Scrutinize your monthly statement, and if you see fees you feel shouldn't be there, call the bank or ask a teller about them. Some bank tactics are truly objectionable, such as deducting bigger payments from your account before smaller ones—regardless of chronological order. Another sneaky trick is moving up the day on which automated monthly payments are deducted. Those types of practices are meant to keep your balance as low as possible, so you're more likely to get stuck paying fees. If you notice that kind of chicanery, let the bank know you object.

Accept the loss of some privileges. After the freewheeling years that led to the 2008 financial meltdown, the banking industry is changing. New rules are meant to rein in the riskiest practices, making the financial industry more stable but less profitable. That means giveaways that were once financed by lush profits elsewhere will likely dry up. Reward programs may disappear or become less generous. You may have to pay for checks, which actually do cost money to print and mail. Credit card rules may become stricter, even for users who pay their balance in full each month. Demand fair treatment from your bank, but don't expect something for nothing. Those days are over.

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Don't chase offers. Some banks give away iPods or other gizmos to lure new customers. And credit card transfers often seem like a good way to get a lower interest rate for a few months. Resist. The best strategy is to consolidate your banking and credit card accounts at a bank you like, to maximize the benefits they'll offer. Then throw all those other offers in the trash. New accounts are likely to come with increased fees or less favorable interest rates at some point, once the thrill of the new iPod has worn off.

Find a better bank. It's important to note that banks are not adopting new fees in lockstep. Citibank and Ally Financial, for instance, have said they have no plans to raise debit card fees or add new ones. Many smaller banks and credit unions continue to offer better deals than their larger competitors—and they'd love to have your business. Switching banks can be a pain—which banks know. Many seem to be hoping that customers, for all their griping, will be more inclined to swallow new fees than go through the hassle of closing their account and opening a new one someplace else. Maybe so. But at least you've got options.

Twitter: @rickjnewman

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