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With banks struggling to make ends meet, they are charging consumers higher monthly service charges, bigger ATM fees, and an arm and a leg for bounced checks. Make sure you are not on the receiving end of these surcharges by taking the following steps:

1. Drive the extra block and withdraw cash for a ready teller that does not charge you fees.
2. Pay close attention to your balance to avoid bounced checks. I suggest giving yourself a $200 cushion. If your balance drops below $200, transfer money from savings or stop making purchases.
3. And make an appointment with a bank representative to review the fees you are charged for your checking account. Prior to the meeting, review your latest bank statement and highlight all the bank charges. Ask about each of these charges and how you can avoid them. In particular, long-time clients with large daily balances might be able to negotiation the best terms. If you are unable to negotiate great terms, at least be aware of the small charges the bank might assess for certain activities.

 Avoiding fees is not complicated, but it does require that you are alert and proactive.

The Federal Reserve is banning the banks’ ability to charge overdraft fees for automatic payment of ATM or debit charges that put your account in the red. Banks have historically allowed these transactions, charging consumers a hefty overdraft fee—usually about $35—for ATM or debit card charges that caused an account to be withdrawn. But on November 12^th, the Federal Reserve banned ATM and debit card overdraft fees unless consumers “opt in” to an overdraft protection program.

This means the banks will simply decline ATM and debit card transactions* that put your account in the red. Your purchase will be refused, but you won’t be charged an overdraft fee.

This new rule will take affect July 1 (yes, in 7 months… why does it always take so long?). If you want the banks to continue paying ATM and debit card transactions that cause your account to be withdrawn, visit a teller at your bank next spring and ask about your overdraft protection options.

And what about those who do not want their bank to cover withdrawals from accounts with insufficient funds? If you fall into this camp, visit your bank now and ask that it stop automatically paying transactions that overdraw your account. While banks are not required to oblige such requests until July 1, banks might be eager to please unhappy customers.

Regardless, prevent overdraft fees by creating a $100 or $200 cushion in your account. Today, make an adjustment to your bank ledger so that your records show that you have $100 or $200 less than you actually have. This will help protect you from overdrafts caused by charges that might have slipped your mind. 

* This new law applies to debit card and ATM transactions only. Banks are not banned from providing automatic overdraft coverage of checks and automatic recurring payments.