Even with many of the announced changes in the way banks operate, one must be aware of “hidden” bank charges or fees that are still part of how a bank does business. It’s not just about overdraft fees, but also about transfers and cash advances.
Balance
Calculate the interest percentages involved when you transfer credit balances from one card to another. Even if you’re shifting to a 13% rate credit card from one with 15%, if your transfer has a 3% admission fee, then you’re not saving any money in the transfer. This can result in hundreds of dollars lost in a year.
Before transferring credit balances from one bank to another, ask exactly what the transfer fees are and how they are applied.
Advances
Cash advances have a transaction fee that is usually from 3% to 5%. And there is no grace period, as the interest rate starts immediately. Check on the mechanics of your credit card’s cash advance – you may be losing on the transaction fee and interest rates, instead of lessening your losses.
Foreign currency
While it is much easier to use a credit card that can also be used in other countries, check your credit card’s fees for transactions in foreign currencies. There may be a 3% fee for the purchases, tucked into the statement.
A better choice would be to open a new account with an institution whose rates are around 1%, like Capital One or Charles Schwab. On the other hand, Wells Fargo might be better if you will withdraw money from an ATM in another country.
Requirements
Finally, be careful of your minimum balance requirement. If you go below it, you will end up paying hefty maintenance fees. This is one good reason why it is important to keep track not only of your expenses, but all the hidden bank charges as well.
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