Ways to avoid or reduce five of the bank fees

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CHICAGO (AP) -- From Occupy Wall Street protesters to retirees, consumers are riled up about bank fees like few other personal finance issues in memory.

Bank of America's announcement of a $5 monthly fee for debit card transactions was the flashpoint for many who feel they're being nickel and dimed in a tough economy.

There's an increasing frustration that seemingly any banking activity may now incur an extra charge. Bank of America charges customers $8.95 in any month that they use a teller to make a deposit or withdrawal.

The fees are mounting. All told, 60 percent more bank accounts carry fees and balance requirements than a year ago, an August survey by Bankrate.com found.

It's up to individual consumers to tackle their own fees head on.

The new charges have at least accomplished one positive thing -- serving as a virtual call-to-arms for consumers to take action by changing accounts, switching banks or otherwise trying to get around or reduce fees that have been quietly mounting.

Many consumers weren't even aware to look at their monthly statements for new fees before the uproar over debit fees erupted, says Mechel Glass, director of education at CredAbility, a national nonprofit credit counseling agency.

Why now? Because banks are trying to make up for the billions of dollars in revenue they're losing due to new regulations that Congress imposed in order to better protect consumers and merchants.

Savvy consumers, though, can sometimes avoid fees by changing their behavior if not their bank. Here are five of the most painful bank fees and steps to minimize or avoid them altogether.

DEBIT CARD FEE

Several banks are joining Bank of America in slapping monthly fees on customers during any month in which they make purchases with their debit cards. Wells Fargo & Co. and JPMorgan Chase & Co. are both testing $3 monthly fees for debit cards in a handful of states.

Action steps: Consumers Union, a nonprofit advocacy group that is concerned about unfair fees, is fighting this one on consumers' behalf by urging banks to drop the fees.

But hoping such a campaign gets them scrapped doesn't mean standing idly by. If the banks refuse to dump the debit card fee, consumers should consider dumping them. Credit unions and regional banks are ready to welcome them with low-cost or free debit card services.

MONTHLY SERVICE FEE

Checking accounts are no longer fee-free havens. Only 45 percent of banks offer free checking, down from 76 percent two years ago, according to Bankrate. And average monthly fees have risen to $4.37 from $2.49 last year for a non-interest checking account and to $14.15 from $13.04 for an interest-bearing account.

Keeping a lot more money in the account is the banks' requirement to avoid steep new fees. Beginning in December, Citibank will charge $20 a month to customers with some interest-earning accounts who don't keep at least $15,000 in their combined checking, savings and investment accounts or loan balances.

Action steps: Many banks will waive checking account fees if you set up direct deposit. Citi customers can avoid the higher new $10 monthly fee on basic checking accounts by making a single direct deposit and online bill payment per month.

And move away from interest-bearing checking accounts. The Bankrate survey found that they require an average minimum balance of $5,587 to avoid fees, compared with $585 for non-interest checking accounts. The extra cost is hardly worth it.

ATM FEE

The average fee that banks charge non-customers to use their ATMs rose to $2.40 in 2011, according to Bankrate. Then there's the charge your own bank hits you with for straying to an out-of-network ATM. That makes for a double fee that totals a combined $3.81 on average, just for withdrawing your money.

Action steps: Do your homework on what your account allows and whether you might be able to switch to one of the increasing number of accounts that allow free out-of-network withdrawals. Plan ahead in order to avoid using non-network ATMs.

OVERDRAFT FEE

Fees for non-sufficient funds, or overdrafts, are soaring too. The average fee has been increasing annually and is up to $31, according to Bankrate.

Action steps: For starters, don't opt in when your bank asks your permission for overdraft protection, or opt out if you already said yes. Banks can't charge you for covering a payment unless you opt in.

Still, this should be easy to avoid. You need to monitor your available account balance online regularly. Signing up for email and text alerts will help. And you can link your checking and savings accounts.

PAPER STATEMENT FEE

When a bank urges you to "Go green!" and get your statements online, beware. That's to get you to save them the cost of mailing them.

Some banks now charge as much as $3 a month for a paper copy of an account statement.

Action steps: Sign up for online banking and save yourself $36 a year. You can print it out on your own if you like.

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When it comes to all these and other bank fees, know your options before you do anything drastic. Read all the mailings you get from your bank and check the website to learn about its fees.

And don't be afraid to either call or show up at your local bank to ask about your fee options before you take on the hassles of bolting to a competitor, advises Greg Daugherty, executive editor of Consumer Reports.

"As peeved as you may be, go in and say 'I'd like to stay with you, but what can you do to remove these fees? Do you have a different kind of account, or is there some other arrangement?'" he says.

It worked for Daugherty, who succeeded in dodging a new $15-a-month checking fee by switching to a different account. It might work for you.

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