Bank charges are too high: Introduction
Banks keep raising their fees and blaming it on inflation and rising costs. The reality is that bank charges are too high because bank fees are an easy cash grab. In fact, according to Statistics Canada, Canadians paid an average of $216 in bank service fees in 2015.
The Big Banks currently charge monthly chequing fees ranging anywhere from $3.95 to $30 per month. Shocking, isn’t it? This is great news for the banks who strive to make the highest possible profit for their shareholders, and some of those profits are coming at your expense.
Bank charges are too high: Want to save money?
Want to save money? Start reading your bank statement carefully! What fees are you currently paying?
- Paper billing
- Cheque book fees
- Chequing account fees
- Debit fees
- ATM fees
- Overdraft fees
- Foreign transaction fees
- Non-Sufficient Funds (NSF) fees
- Cheque certification fees
Bank charges are too high: It wasn’t always this way
Outrageous bank fees weren’t always the case. “It used to be that people did not pay a monthly fee for banking because funding came from the spread between what banks made on loans and what they paid out in interest on deposits,” writes Kate Payne, spokesperson for the Canadian Bankers Association. This of course makes perfect sense but then the banks realized how much greater their profits could be by charging additional fees for every type of transaction. Fees have now become an important part of a bank’s revenue model.
Bank charges are too high: Canadians are loyal to a fault
Although there are lower cost alternatives like online banks and credit unions, Canadians are loyal to a fault to the Big Banks. According to the Financial Consumer Agency of Canada (FCAC), regardless of what we’re being charged in fees:
- 68% of Canadians and 96% of Ontarians still bank with one of the Big Five Banks
- 8% bank with a branchless bank
- 3.5% solely bank with a branchless bank
Bank charges are too high: Some ideas to fight back
What can you do if you’re paying too much in bank fees?
- Go to an online bank or credit union
- Negotiate with your bank for a better deal
- Review your current account package and see if it’s still right for you
- Use the Account Comparison Tool from the FCAC website to shop around – see what’s available and how your account compares
- Ask for youth or student accounts if applicable
- Ask for senior’s discounts if applicable
- Use your own bank’s ATM and avoid convenience fees
- Take advantage of cash back to avoid additional transaction fees
Bank charges are too high: What if you have too many expenses?
There are many ways to save money and paying attention to how much you’re paying in bank fees can be an excellent cost saving measure. If you’re having serious financial problems cutting back on any unnecessary expenses is vital to your recovery. But, you can’t do it alone.
A professional trustee can help you solve your financial problems with immediate action and the right financial plan. Ira Smith Trustee & Receiver Inc. can help you get back on your feet and enjoying debt free living Starting Over, Starting Now. All it takes is one phone call.
