Since 1984, when I was a college student, I have had a credit card. I still have my first card, which originally had a limit of $300 and was issued by my hometown bank.
Well, that bank was bought, and then it was bought again. My little hometown card today is a BankAmericard Cash Rewards card, and the limit has increased into five digits.
That card has been my good friend. As my family has grown, this card has been there with me. I bought our first car seat with it. I used it to pay for art supplies so my then-toddlers could paint on the kitchen floor (newspaper was taped to the floor). As the kids grew, we used the card to buy them computers that they could use for their school work. Meanwhile, I have built exemplary credit by having a card for three decades.
My loyalty to my card has paid off. Now, without even making an effort, I am clearing about $800 a year just for using the card.
That’s right. I make $800 a year, and nothing is cutting into that sum. That’s the power of rewards cards.
Here’s how I’m doing it:
I don’t pay an annual fee. Annual fees cut into how much you profit from rewards plans, and you need to account for them when deciding on the best card for you. Because I have no annual fee, my cash back is pure profit.
I don’t carry over a balance. This means I’m not paying interest, which would further dig into my rewards. That’s something CreditCardForum.com chief Ben Woolsey advises that you do if you are going to use a rewards card.
“If you carry balances on a regular basis, it’s best to avoid a reward card altogether,” says Ben.†So, because I pay my card bill in full and on time each month, I’m further benefiting from this card’s rewards.
But how do I use my card? Actually, I don’t use the favorite tricks of rewards card experts. I don’t put my utilities on it, for example. And I don’t shop at specific stores to max out my points. However, if we have a big purchase, for example, holiday shopping or a new computer, the Bank of America card is my card of choice.
As a result, I accumulate about $200 in cash back every three months. I credit my card account with the cash, and put it toward the next month’s bill.
There are other things I can do to maximize my rewards.
For example, by shopping online on my card’s WorldPoints Mall, I found one retailer that gives you 17 points back for every dollar you spend. Four points for every dollar spent is typical on this site, and the 400 retailers include major merchants such as Macy’s, the Apple Store, Staples and The Home Depot.
The card is very versatile, with the option to get gift cards or travel rewards instead of cash.
But I don’t plan to change my shopping habits — nor should you. You shouldn’t have to adjust your life to benefit from a rewards card. Instead, shop for the one that fits your needs.
When you are shopping for a rewards card, go through this checklist:
Does the card have an annual fee? And if so, will you spend enough to recoup the annual fee? (See the chart below to use for cashback plans.)
Will you be able to pay the card in full and on time each month? Otherwise, you are just wasting your money.
Does the card fit your current lifestyle? For example, will you primarily use the card for groceries and gas? Then, you want a card that pays $2 or more for every dollar you spend on those items.
Part 2 of fitting your lifestyle: Make sure your favorite stores fall under the merchant category codes that the card rewards. For example, see Visa’s code list.
Travel a lot? Look at travel cards that reward you for using your favorite hotels and airlines. (My husband and I made the mistake of upgrading his American Express Delta card. We pay $195 a year, get lots of travel benefits and have 59,000 Delta points, but we don’t use them because we no longer travel on Delta. So we are wasting money on a rewards card that we aren’t taking full advantage of. Why? Because it doesn’t fit our lifestyle.)
I’ve found that by having a card that fits my lifestyle, that doesn’t have an annual fee, and by paying in full and on time, I not only maintain a high credit score, I actually make money by using the Bank of America card. Not bad for a little hometown card that started with a $300 limit.
The rules state that banks cannot charge consumers overdraft fees for debit card purchases or ATM transactions unless the consumer receives information on the bank’s overdraft protection service and opts in to overdraft protection.
When I opened my current bank account, I knew about the rules and chose not to opt in. I tend to make a lot of debit card purchases, and I definitely didn’t want to get hit with multiple $35 overdraft fees if I made a mistake and let my balance get too low. I’d much rather have my card declined and suffer a tiny bit of embarrassment.
This fall, I messed up. I had a busy few weeks and forgot to transfer money from another account to cover a household repair I’d paid for from our main account. Our balance got low, and my husband and I each made several small debit card purchases in one day.
When I logged into online banking a few days later, I was shocked to see $280 in overdraft fees. I immediately called customer service and eventually got all of the fees reversed.
So, how can you avoid being in the situation I was in? The federal Consumer Financial Protection Bureau recommends that you know your opt-in status.
If you haven’t opted in, I’d recommend getting proof in writing and keeping it on file. After my incident, the bank customer service rep I spoke with sent me a letter stating that I have not opted into overdraft protection. I stuck it in a file folder with my other banking information.
If you do end up in a situation like mine, here’s how to handle it:
1. Call the bank right away. Explain that you chose not to opt in to overdraft protection and were charged overdraft fees by mistake. Ask to be credited back the full amount you were charged. Be friendly and calm, Learnvest.com recommends in its guide to talking your way out of bank fees.
2. Don’t accept less than you’re owed. It’s often possible to get one or two overdraft fees waived by asking and being persistent, according to the personal finance blog I Will Teach You To Be Rich. This is sometimes referred to as a one-time “courtesy refund.” In my case, the bank rep first offered to refund me $140, or half of the total amount I was charged. However, if you have not opted in to overdraft protection, you should not have to pay any overdraft fees for debit card transactions. (The opt-in rules don’t apply to checks or direct debits such as recurring bill pay, though.) So, be politely persistent.
3. Show that you know the law. Let the bank know that you know your rights. Here’s what I said: “I know federal rules prohibit banks from charging overdraft fees for debit card transactions unless the consumer has opted in to overdraft protection. I’m 100 percent sure I did not opt in. So, could you please reverse all of the overdraft fees I was charged?”
4. Ask for written proof you opted in. If the bank rep still doesn’t agree, you can say: “Are you saying that I am opted in to overdraft protection? If so, can you please provide me with written proof with my signature on it showing I opted in?” That’s the magic line that got the bank representative to check for a record of my opting in. When she got back on the line, she confirmed that she could not find anything showing I had opted in, and she agreed to immediately reverse all $280 worth of charges. I Will Teach You To Be Rich recommends you keep records of all of your customer service calls to make sure the bank keeps its end of the bargain. In my case, the rep followed through with her promise.
So, if you know the bank was wrong to charge you an overdraft fee, keep at it. You should win — eventually.
The past year has been a big one for data breaches at retail giants, with Kmart joining the list this month. And in the wake of these security breaches, retailers often try to mitigate the damage to customers by offering free identity theft monitoring.
That makes sense: The 2014 Identity Fraud Study by Javelin Strategy & Research found that data breaches are the biggest risk factor for identity fraud, and that one in three consumers who got a data breach notification in 2013 became a fraud victim.
Now, Home Depot is offering 12 months of protection from AllClearID to anyone who believes they used a payment card at the home improvement store any time after April 1, 2014. And Kmart is offering credit monitoring from Experian’s ProtectMyID for customers who made card purchases at the discount chain between Sept. 1 and Oct. 9, 2014.
Consumer Reports, which has criticized ID theft monitoring products in the past, now tells consumers there’s no reason to turn down free ID theft protection, provided you understand its limitations. I agree, simply because monitoring does alert you to any new activity on your credit report.
That’s why, back in February, I signed up for the free ID theft monitoring from ProtectMyID, offered by Target after its massive data breach, which was revealed last December.
The product is customized for each retailer that offers it, so the features on the product I got are slightly different from the ProtectMyID product offered to consumers who pay for the service, says Becky Frost, senior manager of public relations and consumer education for Experian Consumer Services.
Now that I’ve been using it for the better part of a year, I’m not too impressed. But it is free, and I’m considering signing up for the Home Depot ID theft protection, since I swiped my card there to buy some painting supplies over the summer.
With ProtectMyID, I get an email “surveillance alert” whenever there’s activity on my credit report. The first few times this happened, I freaked out. The alerts begin with this nerve-wracking warning: “ProtectMyID has detected signs that your identity could be at risk.” And it urges you to log in right away to view your alert.
But I do wonder if stoking the worries of already edgy consumers might make them more likely to go for an upsell — one of the beefs Consumer Reports has with many ID theft monitoring services.
For example, with ProtectMyID, each “alert” offers a brief description of the activity on the credit report and also includes a link offering your three credit bureau reports and scores. When you click on it, you see the price: $31.95. No, thanks. (You can get your credit reports for free once a year at AnnualCreditReport.com.)
“As a convenience, the product provides a way for members to order credit reports from all three agencies in one location and reflects the charges that are incurred by providing reports from the three different credit reporting agencies,” Frost says.
But through ProtectMyID, I can’t even look at my current Experian report without paying $9.95. When I click on the “reports and scores” tab on my ProtectMyID dashboard, I get a message saying I don’t have a current report on file and an ad offering me the chance to buy my Experian report and score or my three-bureau report and score.
ProtectMyID provides one Experian report to members when they enroll, Frost says. “Because credit reports are updated frequently with information provided by lenders, the report is available for 30 days after the initial pull,” she says, adding that members are notified of changes through alerts.
I do remember looking at my report when I signed up, but didn’t realize it was a one-shot deal and Iíd have to pay to look again later.
However, AllClear ID, the service Home Depot is using, claims it doesn’t upsell to data breach victims.
I did just get a notice that three new features had been added to my ProtectYourID† account. They are:
Lost wallet protection, in which customer service reps will help you make calls to cancel and replace your cards if your wallet is lost or stolen. That sounds OK, but I’d probably just make my own calls.
National change of address monitoring, to thwart ID thieves who might try to reroute your mail.
And Internet monitoring, which checks online black markets where stolen information is traded and sold. To me, that sounds like a valuable addition to the service.
If you do sign up for a free ID theft monitoring service, remember, as the nonprofit consumer protection group Privacy Rights Clearinghouse points out, there are types of fraud the services can’t protect you against. For example, they don’t alert you to fraud in which a legitimate account is used — such as when a crook uses your credit card number to make a purchase.
So, it’s important to monitor your existing accounts, including your checking accounts and credit cards, for suspicious purchases.
And for retailers and ID theft monitoring providers, here’s an idea: How about offering data breach victims a free service that includes ongoing access to our credit reports and scores from all three bureaus without upselling?
That would offer real value and create some goodwill with customers who are getting awfully tired of hearing news of yet another data breach.
Live in a big city with an active Craigslist? If so, you have a major advantage when it comes to selling stuff to pay down debt. But, even if you don’t, you still have options.
When I lived in Kansas City, which has a bustling Craigslist community, I could quickly turn unwanted items into cash.
My husband was in grad school during the recession, and I used Craigslist selling to supplement our income. Most of our budget was dedicated to paying bills, including our mortgage and my student loan debt.
If we were short on grocery money or just wishing for a date night with cheap wine and snacks from Aldi supermarket, I’d find something to hock on Craigslist. It helped us not feel too deprived during those lean times.
In Kansas City, I could post certain types of items online and almost be guaranteed to get multiple responses and make a sale within days. A bike would be claimed within five or 10 minutes — really. Nice wood furniture was popular. So was anything cool, unusual or vintage.
Here are just a few of the things I easily sold back in those days:
Vintage ads from Kansas City businesses that had been used to line the floor of our attic and were still in good shape.
A hideous wood bookshelf I had painted maroon and decoupaged with Frida Kahlo pictures in a moment of bad taste. I listed it for $100 and sold it to a young woman who loved it.
Antique medicine cabinets ripped out of a neighboring house and left on the curb as trash. I sold them for $100 each.
Vintage cabinets and a vintage sink. I had bought a group of items, which included the cabinets and two sinks, to get one of the sinks for my house. I bought the lot of items for $75, then I flipped the rest of the items on Craigslist and made about $250. I got my sink “free.”
After I moved to a smaller town in the South three years ago, I expected to be able to use Craigslist again when we were trying to pay off my husband’s student loan and other debt. But I got an unwelcome surprise.
Online selling is much less popular here, and the only things that sell quickly are practical items such as appliances and tools. I sold a chest freezer, my old bike and some pedestal sinks taken out of our house during a remodel. But it took weeks.
And usefulness is no guarantee that an item will go: We’ve listed a lightly used mini-fridge multiple times with no luck. And the antique items that were so popular in Kansas City are almost unsellable here. For example, we had a beautiful tiger oak pedestal table that we’d bought at an antique store in Kansas City. It didn’t fit in our house here, so I put in on Craigslist. After listing it multiple times for months, I sold it, in desperation, to a guy who talked me down to $30.
So, what can you do if you also find yourself in a small town or rural area where selling on your local Craigslist isn’t a snap? Here are a few ideas:
Sell to a store or dealer. We took out some walls during a remodel, leaving us with six beautiful antique doors that did not sell online. I emailed an architectural salvage store owner and he snapped the doors up for $200. In retrospect, I should have called local antique shops about my oak table. And for items such as clothes, jewelry and bags, consignment shops can be a good option.
List on a larger city’s Craigslist. If you live within a few hours of a large city and are planning a trip there soon, consider listing your item on that Craigslist. This is only worth it if your item is worth a substantial amount — for me, that would be $100 or more, since you’ll likely have to drive out of your way to meet the buyer, and some buyers can be flaky.
Scout out the best place to sell online. About.com’s Frugal Living guide recommends selling books online, noting that you can check BookScouter.com to find the online book seller that will give you the most bucks for your books. About.com recommends selling clothes on eBay and listing vintage items on Etsy.com.
Sell through an app. Learnvest.com suggests using apps such as DeCluttr. You can scan the bar code of your old CDs, DVDs and video games and find out how much DeCluttr will give you. You then download and print a label and ship for free. Another app, Poshmark, lets you create a ‘virtual closet’ and sell clothes to buyers all over the country.
While I still lament my loss of Kansas City’s Craigslist, I am excited about exploring some new options — especially apps — to help us pay off our current credit card debt.
How’s your debt tolerance? After some trial and error, I’ve discovered mine is close to zero.
That is, I don’t feel comfortable being in credit card debt, even when I get a great zero-percent deal — something my husband and I did during our remodel this year.
It was a hard decision to go into card debt because we’d just gotten out of debt the year before, with the exception of our mortgage. But we did put some appliances and remodeling supplies on credit back in January, and I truly felt OK with it at the time. It was a relief to be able to finish our kitchen and get cooking again.
However, as the months have gone by, carrying a balance, even at zero percent, has made me feel anxious and bogged down. In contrast, when we were debt free (except for our mortgage), I felt much more financially secure, happy and free.
I’m not alone. A July 2014 survey by market research firm Mintel found that, right now, many consumers are cautious about taking on new debt. And, according to Mintel Vice President of Research Marla Commons, consumers are “particularly reluctant to borrow on their credit cards or against the equity in their homes to finance spending.”
Not all consumers despise debt, though.
My husband, Joe, falls into this camp. He’s apparently got a higher debt tolerance and isn’t bothered at all by our balance. In fact, he says he’d rather rack up more debt to pay painters to paint the exterior of our house than do the job ourselves.
Sure, I’d rather spend these beautiful Georgia autumn Saturdays riding my bike. But rolling up my sleeves and getting some paint spatter on me sounds a lot more appealing than pulling out the credit card.
Carrying a balance can have major downsides: It might mean you’re paying hundreds of dollars in interest, and it also can affect your credit score by changing your credit utilization ratio — the amount of your total credit limit that you’re using, WallStCheatSheet.com points out.
But my dislike for debt is more emotional than rational.
I discovered the pain that debt can bring when I was first learning how to manage my finances. I’d racked up a credit card balance by just spending a tiny bit more than I earned. This left me feeling panicked, like I always was playing catch-up. I found that dialing my spending back just a little and making sure I had the money before I spent it made me feel much more in control. That lesson has always stuck with me.
I asked consumer psychologist Kit Yarrow, a professor at Golden Gate University in San Francisco, for her take on debt tolerance.
“People who are more security oriented will have a tougher time with debt,” she says. That trait can come from uncertainty in childhood — economic, or other factors, such as an illness or loss, she says.
That makes sense: My family didn’t have much money when I was very small. However, I’d say my bad experience with mismanaging my own finances right after college played a big role in my current attitude, too.
“Debt phobes like you and me are more common than you might imagine,” says Yarrow, who says she refuses to carry credit card debt and also is married to a spouse who’s less debt averse.
She says there’s “irrational thinking” at both ends of the spectrum — both the debt haters and those who see no problem at all with being deep in debt. For example, she says it can make sense to go into debt in certain scenarios, especially with a low- or no-interest deal.
And some types of debt can be good: We have a mortgage, which allows us to build equity in a home, provides us some income tax breaks, and helps keep our credit strong when we pay on time, which we always do.
But I’m going to embrace my inner “debt phobe” and use my uncomfortable feelings about owing money as a motivator to get back out of credit card debt once and for all. From experience, I know I’ll feel better when our balance hits zero.
My teenage boys have had savings accounts since they were in elementary school.
In the beginning, I divided their allowance up for them into savings, spending and charity. The money was automatically deposited at the first of each week, and they learned some great lessons with those accounts. They learned how to shop for a charity, how to save for things they wanted and how to spend (relatively) carefully.
This year, we got them debit cards, we upped their allowances, and made them responsible for saving for school supplies and clothes. So far, it has been a success.
But soon, we’ll be taking the next step. My eldest boy, George, will turn 18 in a few months, and his banking needs may change. For two years, he will study at a local college. He then plans to move to another city to get his bachelor’s degree. He recently asked me if he could stay with our credit union, and we did some quick online checking. The answer: He can do some banking in his new town with a partner bank, but there are limits, such as the amount of money he can withdraw in a day.
So, is George ready to shop for a bank? If he left home tomorrow, the answer would have to be no. Here’s what I’ve begun to teach him, so he’s prepared when the time comes:
One of the first lessons George learned when he received his debit card was that overdraft protection is a mistake. You get slammed with fees every time you go over the amount of money you have in your account. I’ve taught him that it’s better to take the walk of shame from the counter after being told he has insufficient funds than to get hit with a $30 fee for buying a $2 Coke. He’s done the walk of shame, and now checks his accounts online frequently.
This one is a little trickier — George has a tendency not to carry cash, a byproduct of his generation, I think. But I’m teaching him to plan his trips to the ATM machine, so that he isn’t tempted to use an out-of-network machine. Too many ATM fees is actually a problem for college students, according to an August 2014 Consumer Reports study that looked at schools’ alliances with banks.
Part two of using in-network ATM machines: There are ATM machines placed by scammers on tempting street corners, waiting for you to give up your debit card information. Lesson: Use an ATM you know, and when traveling, an ATM located at a bank you know.
The Consumer Reports study shows that college students may not get the best deals when it comes to banking if they opt for the banks their schools align with. The study found that kids who used their bank frequently could spend as much as $520 in fees a year. Out-of-network ATM costs and PIN-debit transaction fees were a particular problem for these students. But, by shopping around, students can minimize their bank fees. George will need to take note of his banking habits before he settles on a bank. Does he want the convenience of an on-campus ATM? Will he be using his debit card frequently for in-store purchases? He’ll need to comparison shop for fees, as well.
MyBankTracker.com advocates using larger banks, which frequently have student account programs that, in some cases, don’t charge excessive fees. However, MyBankTracker’s Theresa Kim notes that your student needs to make sure there is a branch or even an ATM near campus.
Money.USNews.com points out that financial institutions are developing online money management tools that can help students budget their money. It will be worth George’s while to check out Mint or its ilk once his banking needs become more complicated.
My goal is to have George ready to comparison shop for banks once he turns 18. He’ll be hard pressed to find a better deal than our current credit union (we have never paid a fee in our 14 years there), but there will come a time when he needs to choose his own institution, and I want him prepared.
When my husband and I went to refinance our mortgage a couple of months ago, we ran into an unexpected glitch: an old dispute on my credit report.
We were at the tail end of the application process, and I’d spent over a month supplying all the documents our bank, SunTrust, needed. I thought we were close to closing when a bank representative told me the refinance couldn’t proceed unless the dispute was removed from my credit report.
The dispute was over a late payment on a student loan account that I paid off in full last year. The late payment had been reported six years ago when a check I sent apparently was lost in the mail. By the time I figured out what had happened, my payment was over 30 days late and was reported to the credit bureaus. I disputed the late payment, but it stayed on my account.
On my credit report, the account showed up with a remark: “Account disputed by consumer,” making it look as though I had disputed owning the account altogether.
I wish I’d known about advice from mortgage broker Shane Milne, who says his clients have had 100 percent success rate in getting disputes removed by approaching the major credit bureaus directly.
With Experian, Milne recommends asking for the executive customer service team.
With Equifax, you ask for the executive consumer service department, he says.
And with TransUnion, you ask to speak to the special handling department.
By telling the bureaus you are no longer disputing the account, you often can get the dispute removed instantly, Milne says.
But, at the time I was wrangling with SunTrust and the student loan company, I hadn’t come across Milne’s advice. To get my dispute removed, the bank representative suggested I do a conference call with a representative from the bank and a customer service representative from the student loan company. I arranged the call and, after much back and forth, the student loan company agreed to remove the dispute.
A few weeks later, the SunTrust representative told me the dispute hadn’t been removed from my credit report and our interest rate lock was about to expire. The bank employee told me we’d have to pay to extend the rate lock, so it would be better to reapply for our refinance.
I called the student loan company again and was told that their records showed no dispute. I asked to talk to a manager, who asked me to email him screenshots of the dispute on my credit report. I did, and he told me he would remove the dispute but that it could take 30 to 60 days for the change to show up on my credit reports.
Apparently, other people have had the same issue. One person, in a forum on FatWallet.com, complained that his mortgage application came to a halt two days before closing due to a disputed Verizon account. Despite disputing that he owed on the account, he had paid the amount anyway in order not to have any defaulted accounts listed on his credit report. But the dispute remained on the credit report. A reader who wrote in to the Ask Experian column had a similar problem.
The Consumerist recommends that before you apply for a mortgage or mortgage refinance, obtain copies of your credit report, look for any disputed items and get them cleaned up on your own.
I agree, and I definitely would have done that if I had any idea an old dispute could hang up my mortgage refinance.
In the end, though, I’m glad we hit that snag. Since we were going to have to reapply anyway, I decided to do a little more shopping around.
I found a bank with much better interest rate and no origination fee — a charge for getting the loan — which will save us $12,000 over the life of the loan.
So, our credit glitch reminded me that a little time spent shopping around for the best deal on an expensive product can pay off in big savings.
When it comes to rewards cards, I’m not as observant as I could be.
I have a Bank of America Rewards Signature Visa and typically cash in my points for credit on my bill when it’s enough to make a difference. But other than that occasional small balance reduction, I haven’t taken much advantage of this card’s benefits. I know I can do better than I’ve been doing.
That’s why Ben Woolsey got my attention. He’s an expert on reward programs and president and general manager of CreditCardForum.com, the webís largest interactive forum dedicated to credit card rewards programs.
Ben says that with a hefty sign-up bonus and by keeping on the lookout for cards that will maximize your expenditures, you can enjoy great benefits such as trips overseas and free hotel stays. †The trick is to read the fine print and spend some time analyzing how you use your credit card. Do you use your card for groceries? Are you open to paying your phone and cable bills by credit card? How you answer will help you choose the right card for you.
I’ve asked Ben to bring his expertise to our Oct. 16, 2014, Google+ Hangout, hosted by CreditCardGuide editor-at-large Erica Sandberg. At 11 a.m. Central Time, Ben and Erica will explore how you can maximize rewards cards in time for the holidays.
Ben comes with an impressive background in the credit card world. Prior to his role with CreditCardForum, Ben served as an industry analyst for CreditCards.com. He has also worked in the credit card industry for several of the nationís largest issuers, where he has managed co-brand partnerships and designed reward programs.
Erica is a personal finance expert, advice columnist and show host. She is author of “Expecting Money: The Essential Financial Plan for New and Growing Families” and is KRON-TVís consumer finance expert.
At our Google+ Hangout, the chief of CreditCardForum will talk about:
How to get the most out of your travel points.
What you need to know about annual fees.
What can happen when you don’t use your card enough.
When a rewards card is not right for you.
The dangers of overspending in your quest of points.
Maximizing cash rewards.
Choosing the right cards for your priorities.
Why you should also be thinking in the long term about your rewards.
Join Ben and Erica at 11 a.m. CT on Oct. 16 on CreditCardGuide’s Google+ page for our G+ Hangout about maximizing rewards cards during the holidays. Questions for Ben? Hashtag #RewardsCardsCCG on Twitter, Facebook or Google+.
The telephone survey of 1,000 U.S. adults, conducted on behalf of the ABA by Ipsos in August 2014, asked consumers to estimate how much they pay in fees for monthly accounts, ATMs and other banking services. The survey also found:
7 percent of consumers said they pay $4 to $6 per month, down 8 percent in 2013.
3 percent said they pay $6 to $9 a month, down 4 percent from 2013.
7 percent said they shell out $10 or more, down 14 percent the previous year.
My husband Joe and I have used a couple of tactics to save on bank fees. The one that has saved us the most has involved using a split direct deposit. Our bank waives the $7 monthly maintenance fee for each checking account that has $100 or more direct deposited into it each month.
Here’s how it works: We get most of Joe’s monthly paycheck deposited into our main joint checking account. But Joe requested that his employer separate out $300, directly depositing $100 into our second joint account and our two individual accounts. That saves us $28 a month or $336 a year.
A few years ago, we also switched from a credit union to our current bank, SunTrust, to save on fees. The credit union didn’t have enough ATMs in the region, and we had plans to take road trips around the South. We didn’t want to get stuck having to pay to go to another bank’s ATM when we wanted cash. That has worked out well for the most part, though we have wound up in a few towns that didn’t have SunTrust ATMs.
The ABA recommends that you opt out of overdrafts, which can leave you with hefty fees, and instead sign up for alerts and keep close tabs on your transactions. Also, the ABA says, some banks will offer you free accounts if you use their bank for many of your banking needs.
Here are a few more ideas for avoiding fees:
Get an account with a bank that doesn’t charge you a fee for using another bank’s ATM and that will reimburse you the ATM fee that the other bank charges non-customers, Time Money suggests. Time Money recommends digital banks Ally and Schwab, which don’t have their own ATMs.
If you do use a bank that charges ATM fees and/or doesn’t reimburse you, download your bank’s mobile app, which can point you to the closest ATM when you’re traveling, Time Money recommends.
Beware of closing an account too soon, SmartAsset.com advises. Some banks charge early account closure fees. For example, PNC Bank charges $25 for closing an account within 180 days of opening it.
And one more tip from me: Always carry cash (I try to have about $50 in my wallet) when you’re traveling by plane. You might find only one bank’s ATMs in an airport and it’s likely they won’t belong to your bank.
I made the mistake of forgetting cash once and hoping that the Atlanta airport would have a SunTrust ATM. No such luck: They had only Wells Fargo, so I had to pay a hefty fee from Wells Fargo and one from my bank, too.
With a little knowledge and planning, many bank fees can be avoided. And, it’s always nice to save a few bucks.
Victims of elder financial abuse, including scams, lose about $3 billion a year collectively, according to a study by MetLife. It’s a big problem, and elder advocates have responded aggressively.
There are hotlines and email blasts that keep the elderly up to date on the latest scams targeting their age group, such as the AARP’s Fraud Watch Network and its fraud-fighting hotline, (800) 646-2283. Also, the government issues alerts, such as the Federal Trade Commission’s advisory on the “grandparent scam,” sometimes called the family emergency scam.
There is understandable concern about the fraud our elderly face, but I have to wonder whether we’re ignoring teens and young adults.
Every time I get an alarmist piece of mail warning me that my car’s warranty is about to expire, or I get an automated call announcing my “final notice” that I’m paying too much interest on my mortgage, I wonder if my two teenage sons would know how to handle these situations.
In the past couple of months, I’ve come up with an action plan that I hope will prepare my boys for the scammers that are out there. Here are my five tips:
Make them answer the home phone. This gives them a chance to hear the different angles of fraudsters, and they can ask me or my husband how to handle the call in real time.
Educate them about personal information. They know not to give their personal information to the Nigerian prince email scams, but do they know not to give out Social Security numbers, driver license numbers or bank account information over the phone? Probably not.
What if the call is legitimate? That said, there will be times when a service provider calls, or heaven forbid, a debt collector. When this happens, I will teach them that the callers should be the ones providing the information. For example, if the caller wants personal details, I will tell my boys to get the caller’s name, employee ID number and then call the company’s listed number to confirm the caller is legitimate. (My financial advice company periodically calls me and asks for personal identifiers before we can proceed. I always get the representative’s name and call the company’s listed number to confirm that it is a legitimate call.)
Have them sign up for the Do Not Call Registry. Explain that they can register their cell phone number now, and home phone once they move out (if they have one), and that they will then be placed on a list banning telemarketers from contacting them 31 days after registration. I will give them a short script to say when a company calls. “This line is on the Do Not Call Registry. Please take me off your list or I will file a complaint.” After 31 days, the legitimate companies will stop calling, and you are left with the fraudsters. (Also, if a caller claims to be with the registry, he isn’t.)
Teach them the fine art of hanging up. If someone calls and clearly wants information or money, teach your kids that it’s OK not to engage them. In fact, there are times when it’s OK to simply hang up. I got a call recently from someone who said she was with “the Claims Department.” I asked what that meant, the caller stuttered and couldn’t say which “company” she was with, so I hung up. My kids were there, and I explained to them what happened.
By giving your kids practical experience in how to handle con artists, you arm them with an important life skill. Don’t let them move out without knowing how to negotiate through the minefield of fraudsters out there.