3 secrets to saving money at CVS

Ramit Sethi says that’s why banks keep ‘ripping you off’

A woman looking worried looking at something on her laptop while sitting at her kitchen table.

Image source: Getty Images

No one likes to be taken advantage of, and that’s what it can feel like to be charged unnecessary bank fees. These fees aren’t usually small change either. The big banks make billions of dollars a year from it, and the average consumer pays $250 a year in overdraft fees alone.

For the people paying these fees, Ramit Sethi recently posed a very direct question: Why do you keep using the banks that are ripping you off? According to this financial expert, there is a simple solution. To stop getting bogged down by common bank charges, stop using terrible banks.

Save: click here to discover a top-notch savings account that can earn you 15 times your bank

More: Check out our best online checking accounts of 2022

The Big Bank Problem

When Sethi talks about “terrible banks”, he is talking about big banks. Specifically, he mentions Bank of America, Chase, and Wells Fargo as things to avoid. The biggest banks have traditionally relied on fees to make money. In 2016, these big three banks collected more than $6 billion in overdraft and ATM fees.

These banks also charge monthly maintenance fees, which means they cost you money just to have an account. You can get monthly fees waived if you meet certain conditions, such as maintaining a minimum average balance or receiving a sufficient number of qualifying direct deposits. Or, you can choose a bank that doesn’t require you to jump through hoops to avoid fees.

To clarify, any bank, big or small, can charge these types of unnecessary fees. However, they are more common among large banks. Since these banks have the most customers and many more branches across the country than their smaller competitors, they didn’t need to eliminate fees to be competitive.

Some of the big banks have recently reduced overdraft fees or made changes to their overdraft policies. This change is largely due to the fact that the Consumer Financial Protection Bureau (CFPB) started to fight overdraft fees at the end of 2021. But these banks still tend to collect too many unnecessary fees that can cost you money. money if you’re not careful.

You don’t need to get ripped off by bank charges

So, what bank charges to avoid? All. If you’re paying monthly maintenance fees, overdraft fees, ATM fees, or any other kind of fees for your bank account, you’re paying too much. There are too many free alternatives to make this kind of expense worthwhile. Here are resources you can use to find a better checking and savings account:

If you shop around, you can find accounts with no monthly fees, minimum balance requirements, and even no overdraft fees. Most of these banks also reimburse you for out-of-network ATM fees.

The only real downside is that banks that have eliminated common fees tend to have a much smaller physical footprint. Some have a limited number of brick-and-mortar branches, and others have none at all. While this is certainly an inconvenience for those who enjoy in-person banking, it’s a small price to pay to avoid fees. In addition, many online banks prioritize customer service to compensate for the lack of physical presence.

Your bank account should be a safe place to manage and save your money. It shouldn’t cost you any money, and if it does, it’s time for a change.

These savings accounts are FDIC insured and could earn you up to 18 times your bank

Many people miss out on guaranteed returns because their money languishes in a big bank savings account earning almost no interest. Our choices of best online savings accounts can earn you more than 18 times the national average savings account rate. Click here to check out the top picks that landed a spot on our shortlist of the best savings accounts for 2022.

We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in the stocks mentioned. The Motley Fool fills positions and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

#Ramit #Sethi #banks #ripping

Leave a Comment

Your email address will not be published. Required fields are marked *