Banking fees: new, bigger and buried deep

At a time when lending money is growing ever riskier, banks are using new and increasing fees to make money. The U.S. Federal Deposit Insurance Corporation estimated in January 2007 that the nation’s largest banks were generating about 44% of their annual revenue, up to $55 billion, from customer fees.

Some of these banking fees are buried so deeply that you may not even know they exist. You’ll have to search to find them.

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How do the banks do it?

Here are just a few ways banks make money through fees:

Automatic Teller Machines. Bank ATM fees generate billions of dollars for U.S. banks, and these fees are rising from $2 to $3 for out-of-network withdrawals pretty much across the board.
Cashier's checks and money orders. Once offered for free or at minimal cost, these now can cost upwards of $10 each.
Checking

You’ll pay dearly if your account has insufficient funds to cover the checks you write. Banks will happily offer you bounced-check protection. If you agree to it, instead of paying a fee each time a check bounces, you’ll be borrowing the bank's money . . . at a hefty price.
A decade ago, you could stop payment on a check for about $10; now the charge can be $25 and more.
Copies of old checks are likely to cost $5 apiece.

Credit cards.

Interest rates have jumped significantly, generating more than $24 billion per year for issuing banks.
Using a credit card to get cash has always been expensive. The cost is rising. Expect to pay about a third more for this service today than you did 10 years ago.
According to MSN Money, fees for late payments and exceeding your credit limit have almost tripled in the past decade.
You’ll pay 4% for the privilege of transferring a balance from one credit card to another.
Expect to pay 3% of the transaction when you use your credit card overseas.

Courtesy services. Did you know that many banks impose a fee when a customer speaks to a teller either in person or on the phone?
Online payment. Sure, this saves a stamp and the time it takes to write a check, but some banks are charging up to $15 each time a customer makes a payment online.

What can you do?

Step One: Take responsibility for your own bad habits

First off, recognize that you can avoid some of these fees by managing your money better. It’s your responsibility to prevent them. When it comes to checking overdrafts, for example, keep enough money in your account to avoid bouncing checks. And balance your checkbook.

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Step Two: Visit your bank and demand information

Walk in, sit down and tell a bank executive that you want a statement laying out all fees for your account. Ask for information about accounts that may be more satisfactory. Don’t rely on the bank’s website for this information. If you can’t visit in person, use the phone. As the insurance company advertisements proclaim, 15 minutes could save you hundreds of dollars.

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Step Three: Take your business elsewhere

Consider credit unions and community banks. If you're eligible to join a credit union, investigate the advantages. At many credit unions, checking accounts are often free, as is overdraft protection. Credit unions, member-owned and not-for-profit entities, often excel at customer service. Likewise, community banks can be more empathetic and customer-focused than giant financial institutions.