Money Strategy Systems® Money Strategy Systems®Free is a word that many banks like to use to get your attention. Next
time you get an offer for a "free" checking account, (or anything
else) read the fine print. There are a few loopholes that could result
in charges. The Truth in Savings law that went into effect nearly two years
ago was supposed to do away with all the advertising tricks that banks were
using with the word "free". However, fees on automated teller
machines (ATM) and debit cards are allowed on what are supposedly free accounts.
Let's say a bank gives you an ATM card with your checking account. In your
agreement with the bank, there are fees for using a competitor's ATM, which
are fairly common and usually cost $1 per transaction. Just remember to
go to your bank's ATM machine, even if it's a different branch, there should
be no charge.
Watch out, you may get nipped for 2 surcharges when using other ATMs.
That's a hidden double-whammy: One for using a foreign ATM (not your bank),
the other a new $1-$1.50 surcharge by the bank whose machine they let you
use. Texas credit unions have adopted these surcharges. A Florida bank offers
a kids no minimum balance "Youth Account" earning 1.65 percent,
but charges a whopping $12 a month when there is no activity on the account
for one year.
There could also be a charge for using your bank's ATM if you do not maintain
a minimum balance. For example, if your checking account balance dips below
$500, you could be charged 50 cents for each withdrawal or balance inquiry
at the bank's ATM. The Federal Reserve says the account would still qualify
as "free". There are still checking accounts offering free accounts
with no minimum balance and my bank even pays me interest. In fact there
are at least 3 banks in my West Palm area of Florida, offering this real
free checking.
The same would be true of a debit card, which looks like a credit card but
works like a check. With a debit card, the amount "charged" is
deducted from your bank account right away. In fact, some debit cards look
like Visa and Mastercard credit cards. Nice way to go if you don't want
to bother writing checks or getting them authorized. Just be sure your bank
doesn't charge you for these little perks and remember to post them immediately
in your checkbook.
Just a word about bounced checks.
Please don't do it! Do you realize that the national average is $19.92 and
in Florida it's more like $26 when you write a bad check? Some years back
when I was really broke , I put an extra $50 in my checking account, but
listed it in my book at $50 less. This way, I always had more money in the
bank, not to mention the possibility of some little addition error I might
make. I was notorious for grabbing $20 from an ATM and forgetting to make
a note in my checkbook!
You may not know it, but you can bounce a check even if it appears there
are funds on deposit to cover it. Banks pay based on deposits that have
cleared, such as cash. Remember that those sneaky banks now charge 5-7 days
of processing, so if you deposit a check, it could take 5-7 days of week-day
time for it to clear. During that time your balance will reflect the check
deposit, but you won't be able to access the funds. If you write a check
for the full balance, it could bounce. In fact, if you write a check with
only part of that balance, it will likely bounce.
Your bank can even charge you for depositing somebody else's bad check.
The average fee across the country is $5.24 and higher in some places. As
the victim of a bad check, you not only have to go after the bad check writer,
but you have to pay your bank the fee. If you suspect the check may give
you problems, why not just cash it at the writer's bank? Being a landlord
I learned to call the bank in advance and ask if the check was good before
going to the other side of town to cash it.
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