Don't let 'vampire charges' bite into your savings.
Little fees can grow into monster problems.
Even in nominal amounts, financial service charges and minor fees can add up over time. These "vampire charges" can bleed your account balance when you're not paying attention — and cause big problems.
Your checking account might be able to absorb a $2.50 ATM fee without much trouble, but if it comes at the wrong time, that $2.50 could put you below the minimum balance your bank requires for free checking. Or you could incur additional fees if several outgoing payments hit at once.
That's how small fees can spiral into costly outlays. But even if you're swimming in cash, do you really want to pay unnecessary extra fees? Here are some of the most common unexpected charges to watch for.
Buying gas at the pump.
Ever checked your credit or debit card balance after pumping gas and noticed a charge for more than you purchased?
That's a common practice called "preauthorization" — a security measure to ensure that you don't drive off without paying for every last drop of gas. The service station's deliberate overcharge typically goes away after a few hours, once the actual charge is processed. In the meantime, your credit limit can be affected, or the money in your checking account can be tied up, resulting in unexpected overdrafts or rejected transactions.
Avoid this problem by paying at the register and asking for a specific amount to be put on the pump.
Paying for basic card services.
Sometimes prepaid card or debit card providers will charge you a fee to check your balance or if you exceed a certain number of transactions per month. Many of these providers charge additional fees if your prepaid balance falls below a certain amount — or even just for the privilege of keeping your account open.
As an alternative, talk to financial institutions that offer free checking and free debit cards with no minimum requirements.
It's easy to justify these fees by saying that you're unlikely to fall below a certain balance or that you'll never make more than a certain number of transactions per month. But when life happens, you can find yourself racking up more fees than you anticipated. And those fees usually come at the worst times.
As an alternative, talk to financial institutions that offer free checking and free debit cards with no minimum requirements — or reasonable ones, such as a single transaction per month. You could save money while enjoying more perks.
See that conveniently located ATM in the gas station, near your favorite farmers market or at the music festival? There's a good reason it's there, and you'll pay for that convenience.
These ATMs are often are not part of any banking or financial network, which means they're almost certain to charge a fee — and it can be a high one — for any transaction.
To avoid getting slapped with ATM fees, download an ATM locator smartphone app. For instance, many credit unions are part of the CO-OP Network, which includes thousands of surcharge-free ATMs nationwide, with a locator app to help you find the closest one.
Vampire charges have a way of sneaking up on you, but it doesn't take a garlic necklace to keep them at bay. A little knowledge and discipline can help you net savings that add up in your favor.