Avoid Bank Fees

With all the clients I have I see many different bank and credit card accounts from international banks, local credit unions and everything in between. Some have really customer friendly policies, but I see some clients getting charged fees left and right – some of whom have large balances on deposit with the bank.

Tips to save on fees with credit cards:

1) PROBLEM: Late fees.

SOLUTION: Set up an automatic payment so at least the minimum payment is made on time each month.

SAVINGS: You can save around $40 a month in late fees by paying on time.

2) PROBLEM: International transaction fees.

SOLUTION: Take a look at your statement. Do you see international transaction fees? Even if you haven’t traveled outside of the country, a vendor you buy from might be located in another country resulting in a fee every time you make a purchase. Pay for these purchases with another card you have that does not charge a fee or apply for a new credit card. Do some research. There are highly rewarding credit cards (both travel and cash back) that do not charge an annual fee or international transactions fees.

SAVINGS: Depends on transaction volume, but up to 3% per transaction.

Tips to save on fees with bank accounts:

1) PROBLEM: Some banks charge for transfers to external accounts causing you to lose money each time you take a draw.

SOLUTION: If you don’t want to switch to another bank, you could write yourself a paper check. Or try paying personal bills with your business bank account. These transactions can still be coded to a draw account and usually don’t trigger a fee. Instead of transferring the money to your personal account and then paying a bill, pay the bill directly.

SAVINGS: Varies based on transaction volume.

2) PROBLEM: Online bill pay fees per month or per transaction.

SOLUTION: Search for a bank that does not charge a fee or compare the fee you are charged to other bill pay services like bill.com which may be lower in cost. Make sure your bank doesn’t offer free bill pay. Sometimes banks offer both a free and paid bill pay option with additional features.

SAVINGS: Varies based on transaction volume.

3) PROBLEM: High credit card processing fees

SOLUTION: Shop around. You don’t have to use the merchant services solution provided by the bank that holds your checking account. There are many third party options. Send your last merchant services statement off to these companies for a comparison quote.

SAVINGS: Varies based on transaction volume and dollar amount of credit card processing.

4) PROBLEM: Overdraft fees.

SOLUTION: Set up alerts on your bank account so you are emailed and texted when your balance drops below a certain amount. This will allow you to transfer funds or stop spending until the problem is rectified. Keep your book balance in your accounting software up to date so you always know your true spending power (i.e., bank balance less outstanding checks).

SAVINGS: Upwards of $30 for bouncing checks plus whatever your payee will charge you. If you have overdraft protection there may be fees for using that service as well which can multiply per transaction.

For personalized recommendations or for a review of your expenses to ensure your business is operating efficiently drop us a line.