Despite the fact that bank charges are likely to continue to rise, there are ways you can reduce your own costs. Here are some tips.
- Only use the services you really need. For example, do you need a current account when a transmission account will do just as well?
- Compare costs at your bank. Banks have different cost structures even for the same services. For example, you may have a choice between paying a fee for each transaction or paying an overall monthly fee. If you perform relatively few transactions each month, the pay-per-transaction option will work in your favour.
- Compare banks' charging structures. If you find you can pay less at another bank, negotiate with your bank for lower charges. In most cases, your bank will want to keep your account - if you are a responsible client.
- There is no reason to do all your banking through one bank. For example, you may get better interest or deposit rates from one bank, and pay lower charges for withdrawals at another.
- Use internet banking. In most cases, the costs can be half of what they are for chequebook transactions. They are also more secure.
- Avoid handling cash. Banks charge for cash deposits.
- Use automatic teller machines (ATMs) rather than bank across the counter.
- Find out if your bank will issue you with a debit card. Debit cards give you the convenience of credit cards, but, because you cannot use them to buy things with money you do not have, you save yourself from falling into a potential debt trap.
- Rather make one large withdrawal at an ATM than several smaller withdrawals - smaller withdrawals cost more than one large withdrawal.
- Avoid using the ATMs of other banks. This costs you more.
- Operate your bank accounts in a responsible manner by not bouncing cheques and debit orders because of insufficient funds. When there is insufficient money in your account to cover your expenses, you will pay penalty interest rates and administration charges. These charges and interest rates are high, but entirely avoidable. You will also receive a poor credit record, which means you will pay a high interest rate when you want to borrow money.
These tips were compiled with the assistance of some of the major banks.