Class is officially back in session! Today, we’re spilling the tea ☕ on everything you need to know about fees––and more importantly––how to avoid them.
Let’s start with the basics.👇
Why exactly do banks charge fees and where does all of that money go?
Historically, banks have charged fees to help pay for their operating expenses (like branches 🏦) and to make a profit. Although, it's been a minute since the first U.S. bank opened in 1791 (Yes, 231 years ago!) and yet many have not changed the fees they charge customers. If anything, they’ve gotten worse.
For example, in 2020 banks collected more than $30B in overdraft fees, often charging customers upwards of $30 for each overdraft. In fact, a report by the Consumer Finance Protection Bureau (CFPB) revealed that the average consumer overdrafts twice a year, costing them quite a bit of money. Sadly, that’s just the tip of the iceberg, so let’s break down all the types of fees to look out for. 👀
4 key banking fees to watch out for:
Maintenance fees: Many banks charge this on a monthly basis for simply giving you access to a checking or savings account to store your money. Yes, we’re serious…and on average, it’s costing consumers $14 per month.
Overdraft fees: And, if you accidentally spend more than what you have in your account (we’ve all been there)––even by a dollar or two––you could be charged as much as $35 for this oversight.
Late fees: This is another major money-maker for banks. Any time you miss a bank’s payment deadline (even if it’s only by 5 minutes), you can expect to incur a charge between $25-$50. We know that sometimes life just happens, but some banks don’t care.
Out-of-network ATM fees: When you visit one of these ATMs, they will clearly state what fee (called an ATM operator fee) you’ll be charged for using a machine that’s not part of your bank’s network (typically charging $1.50-$5). However, what many banks don’t tell you is that they’re going to charge you a fee on top of that fee. Seeing a pattern here?
How to avoid paying fees.
The easy answer: Sign up for Step!
Our mission as a company is to help improve the financial futures of the next generation and a core part of this belief is that everyone deserves to have easy access to basic financial products and education. In fact, let’s take a second to talk about all of the fees we don’t charge:
In fact, we recently partnered with Visa’s Plus Alliance network to give you access to more than 30,000 fee-free ATMs in local retail locations across the country so you can access your money, on your terms.
To check out our fee-free ATM map & locate one in your area: