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The news that banks have been able to generate enormous profits by levying overdraft fees on customers surely rankles many -- particularly during tax season, and considering that many Americans are still feeling pinched by the effects of the Great Recession.
It doesn't have to be this way. Many consumers can avoid paying all sorts of banking fees -- including overdraft penalties -- by following some common sense advice. Where, you ask, can you find these money-saving tips? Surprisingly, you need look no further than the websites of the nation's biggest banks.
Something everyone needs to know
Managing money is important to everyone, and a subject that is very often the subject of online research. According to the Google Adwords Keyword Tool, the term "personal finance" is searched for more than 200,000 times each month, just here in the U.S. For comparison purposes, the phrase "make more money" generates a mere 60,500 monthly searches.
Where is the best place to find such advice online? After writing about the astounding $32 billion banks made last year from overdraft fees, I decided to take a look at their websites to see if they offered anything helpful regarding personal finance, or made any effort to help customers understand how to manage their accounts more efficiently.
I have to say that I was pleasantly surprised by the amount of information available on the largest banks' websites, and how easy it was to comprehend. Here is a quick summary of the highlights each bank site offers.
Bank of America (NYSE: BAC )
Despite all the vitriol heaped upon this bank by the general public, I was quite impressed with the breadth of information available on its site. Its Money Management page provides consumers with myriad links to subjects such as saving on daily expenses and budgeting, with several pages available to browse. The bank's Personal Finance 101 gives some very down-to-earth advice on creating a budget, as well as other helpful tips such as how to set up alerts on your credit card accounts so as to avoid going over your limit.
B of A's overdraft FAQ page is extremely detailed and includes ways to conveniently stay on top of account balances in order to avoid overdrafts. An especially juicy nugget: Beginning in the fall, Bank of America's ATMs will alert customers when withdrawing money puts an account in danger of triggering an overdraft fee.
JPMorgan Chase (NYSE: JPM )
This megabank's Account Tips page offers several useful articles, from setting up a workable household budget to decreasing debt, and some excellent tips on how to improve your credit score. The Quick Tips section gives several ways to keep an eye on your account balances, including setting up free alerts, whereby the bank will text you when your funds reach a specific level.
Wells Fargo (NYSE: WFC )
Wells' money management tips lay out in a no-frills format exactly how to keep track of your checking account, complete with an illustrated check register. Interestingly, the example shows an entry for "Coffee" with an attendant deduction of $3.50. This, I expect, is the bank's nod to the infamous "$38 cup of coffee," caused when a $3 or $4 java purchase sparked a $34 or $35 overdraft charge.
Citigroup (NYSE: C )
Citi's Financial Guidance page is chock-full of useful tips about every part of your financial life, from goal-setting to investing, as well as estate planning and saving for college. Under the Banking tab is a full menu of account alert options to avoid overextending or overdrawing any of your financial accounts -- all available at no charge.
For customers that truly cannot afford to pay upwards of $30 for each overdraft, these tips can be a godsend. For those just starting out, following these money management tips may prevent a pattern of overdrafting in the first place -- and for those who are simply forgetful, those free alerts may be just what the financial advisor ordered. Banks are giving you a way to beat them at their own game. Why not use it?
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