The average American household will pay about $155,000 in useless financial, bank and investment fees over a lifetime, according to a 2014 analysis by FeeX.
Though seemingly trivial in the short-term, these fees clearly add up over time. Which is why doing your due diligence, uncovering hidden costs and shopping around now can offer a major pay off long-term.
Be on the lookout for these seven unnecessary fees and implement these simple strategies to avoid them.
1. ATM Fees.
If your bank charges you a fee for trying to access to your own money, it might be time to switch banks. Many online-only banks waive cash withdrawal fees so that you can use almost any ATM and have the bank reimburse you at the end of each month.
2. Foreign Transaction Fees
If you’re headed overseas, be sure you have a credit card that doesn’t charge foreign transaction fees.
Foreign transaction fees can be as high as three percent. Depending on how often you swipe abroad, that can add up to a lot of extra and totally unnecessary spending.
Shop around for a credit card with no foreign transaction fees. In the long run, it can save you hundreds of dollars as you travel.
3. Overdraft Fees
Overdraft fees can be painfully expensive. Ironically, overdraft protection isn’t always cheap either.
Avoid both fees by downloading your bank’s app and keeping track of your balance and transactions on the go.
When you can see your available balance in real time, you’re more likely to know when you have insufficient funds to make a purchase. So you can avoid swiping your debit card and getting hit with that nasty overdraft fee.
4. Checking Account Fees
Some banks charge account maintenance fees for basic checking accounts — especially if you don’t maintain a minimum balance.
But just because some banks charge these unnecessary fees, doesn’t mean they all do. So shop around for a checking account that won’t charge you a maintenance fee and has no minimum balance requirement. Credit unions and online-only banks are a good place to start your search, as many larger banks are notorious for charging these types of fees.
5. Late Payment Fees
Stay on top of your bills! It might seem obvious, but it’s easy to let due dates slip by if you don’t have a system for staying on top of your payments.
Not only will this cost you in the form of late fees, but late payments can also hurt your credit score. So opt into reminders that notify you when a bill is coming due and consider setting up automatic bill pay to make your chances of missing a payment and getting hit with a late fee even less likely.
Just make sure to review your statements at the end of each month to make sure there are no errors or fraudulent charges.
6. Credit Card Interest Fees
Whenever possible, pay your credit cards off IN FULL each month to avoid racking up interest fees.
If you already have a big balance on your credit card, you probably know how frustrating it is to see all of your dollars go toward interest payments.
When you can, pay more than the minimum on your credit cards, so you can get your balances down to zero sooner and save yourself from paying more interest over time.
7. Investment Fees
These fees can be tough to spot, but it’s worth doing your homework to make sure you’re not paying more than you need to in your investment account. Ask about the fees associated with any investments you make and compare those with competing funds to see if you’re getting the most bang for your buck.
You might not think about comparison shopping when it comes to your investment portfolio, but there’s no reason not to. You can save just as much by working to reduce and avoid fees on your investments as you do anywhere else – if not more!