Here are a couple comments to my post titled Even a Small Leak Can Empty Your Money Bucket Quickly where I talked about how fees from banks seem small, but can add up to large amounts over time.
Here's the first comment:
I used to spend a fortune on bank fees just for convenience. I had the money, so I didn't care...or so I thought. Recently, I was cornered in a situation where I needed some cash. (hospital parking). The foreign ATM charged me $1.75 and I know my bank will charge me $2.00. I'd been pretty good, and fortunately this was probably the first time I'd had to do it in about 6 months. I usually carry cash, and I recognize this instance of poor planning cost me $3.75, more than what I normally spend on lunch!
Most "convenience" stores now use debit cards and will offer up to $10 cash back. Even if you have to buy a pack of gum ($0.49 to $0.79) when you don't want anything (I admit, I usually go for the $0.99 bottle of Ozarka, and we know how expensive that is), it's still a fraction of what the banks will charge you.
Yes, small amounts, no matter what they are spent on can really add up. This is what David Bach calls the "latte factor".
Here's comment #2:
Great info for those who don't realize how far a bank typically reaches into their customers' pockets. I urge everyone to look at credit unions - there are many out there that offer just as many products and services as banks - the difference is that they don't gouge you along the way!
Good suggestion/alternative! Something for all of us to consider.
Free Money Finance recommends Emigrant Direct.
I can't agree more that credit unions are worth looking into. I saved a percentage point or two over the prevailing variable rates for a 5 year fixed home equity loan. It the variable HELOC I'm paying off by 2.3% (this month, the HELOC keeps going up).
Posted by: j.a.random | January 07, 2006 at 11:22 PM
I try to keep a small amount (~$40) on me at all times for the true emergencies. Otherwise, I use the credit card (paying it off each month, of course). When I dip below $20, I consider that "being broke" and make a point to withdraw money the next time I can do so for free.
Posted by: Bill | January 07, 2006 at 11:34 PM
DITTO about the credit union!
I love my credit union. I paid $25 to join. The $25 is in my savings account but is unavailable. They provide 1 box of duplicate checks monthly. There are no fees for debit card purchases, checks, or maint fees. They have free online bill pay. The call center is local (not India!) and they have great customer service.
They are also helping me build my credit history. I have a secured loan (they only charge 1.5% above savings %), a credit card with a $500 limit and an APR of 10.9%, a $300 credit line that reports has revolving credit, and $700 ODP. I have never used ODP but it's nice to have.
One time I had an overdraft from my savings account. It was a $6 paypal purchase that was defaulted to my bank account and I did not pay attention. They removed the fee.
Posted by: Joy | January 05, 2008 at 11:13 AM