Tip #11 - Bank fees

Oh, bank fees. Evil, evil bank fees.

A bank account is necessary for life, but banks are businesses. They want your money, and they want to keep it!

The goal: 
Avoid all bank fees.

The method:
1. Shop around to major banks to find an account which doesn't charge fees. They do exist! In the UK, bank fees on current are pretty much unheard of, but in Canada they're ubiquitous. I've managed to find a good one :)

2. Know the limits and/or benefits of your account. If you are being charged a fee, is this fee waived if you maintain a minimum balance? Does it limit you to a certain number of transactions per month? Does it provide you with bonuses such as loyalty points? It's important to really know your account details and work with and within them.

3. ATM fees. OMG AVOID LIKE THE PLAGUE! If you live in Canada, you CANNOT take money out of a bank machine which doesn't belong to your bank, or which doesn't belong to a bank which is affiliated with your's. DON'T USE THEM unless you're REALLY desperate. I mean, you're stuck down a back alley with a snarling tiger and need a cab to escape desperate. If you're in the UK, happy days! No ATM fees from reputable banks.

An idea to avoid bank fees is to buy using your credit card, then pay off at the end of the month. Another idea is to live on cash only, taking a lump sum out each month. However, this requires careful budgeting and needs a significant amount of discipline to accomplish. 

4. Direct Debits. These can be a dangerous business. While it's nice to "not have to worry about it", if you forget to have enough money in the account, you get charged for insufficient funds. This is my big difficulty. I have been charged 24 pounds in the past year through stupid mistakes of not having enough money for my direct debits.

So here's the thing. If you KNOW you will have the money in your account every month, then direct debit may be useful. However, if you are like me, and live without a steady income, it's more useful to be forcefully on top of your bills by feeling the need to open them. Damn you, UK and you're direct debit culture! Thank you, Canada with it still a modern thing which I can avoid!

5. Cheques. Similar to the above, you need to make sure there is enough money to cover the cost of a cheque. Cheques should be dated, and can be post dated to when they are needing to be used and/or when you know you will have the money. It is the responsibility of the cheque casher to ensure that they are cashing a cheque within time allowances. I've had this happen to me before - I had a cheque bounce because the recipient didn't notice I had post dated. In the end, they appologized and we agreed that I would re-write the cheque minus the cost of the bank fee.


And, finally, a caveat. Bank fees can sometimes bundle in useful services which would otherwise cost you more if purchased separately. These can include, but are not limited to, the cost of cheques, free currency exchange, travel insurance, mobile insurance, and discounts on outings. I made a decision last year to upgrade my account to one which charged a monthly fee, but included all of these. In the end, I didn't have to use any of the services, but the travel insurance and mobile phone insurance meant I had peace of mind. It's something to consider, certainly!


Have I missed any fees? Do you have tips about which accounts have low or high fees? Which accounts reward you the most? Let me know!

Tip #4 - Pick your loyalties

Loyalty cards.  We all have them.  But do we get enough out of them?

Companies like us to get us to sign up to loyalty cards so they can track our spending habits.  To be honest, it's a creepy thought, and if you're not willing to sacrifice your "privacy" for some extra goodies, then this post should be ignored.

But if, like me, extra stuff for no extra dough is really enticing, then the land of loyalty cards can be riddled with potholes.  The problem is, if you are "loyal" to too many companies, you will never get the promised rewards because you will have spread yourself too thin.  So, with that said, here some useful tips and tricks to keep in mind in order to maximise your "earnings":

1. Stick to your loyalties: only keep one loyalty card per use (ex: gas, flights, train travel, pharmacies, supermarkets, etc), and stick, when possible, to retailers which use these cards.

2. Do your online research: don't buy anything online without first checking whether one of your loyalty cards will give you points for the purchase.  Loads of loyalty cards are connected with many companies, and will reward your everyday shopping simply for spending two minutes to go through their website first.

3. Use a credit card which is connected with one of your loyalties: Many loyalty cards have corresponding credit cards.  My advice here is to be choosy and careful. Pick the loyalty credit card which will reward you the most, and use it as your sole credit card for your normal everyday purchases.   Then, pay it off in full every month.  These cards normally have huge interest rates, so it must be used with care and only buy what you normally would.

4. Don't tap into your points too soon: By chipping away at the points, you may miss out on the opportunity to spend them on something bigger.  Point redemption levels often get more favourable the more points you have, so it pays to save them up!

Happy loyalty shopping, fellow frugals!