Common Banking Fees (and How to Avoid Some of Them)

Banking fees can quickly add up if you're not careful, and they can vary significantly depending on the type of account you hold. Whether you’re managing a credit card, checking or savings account, or even a certificate, you should be aware of the potential fees associated with each. By understanding these fees, you can make more informed decisions and avoid unnecessary charges.

Credit card fees

Credit cards can be a great way to manage your money and build credit—especially if used wisely. However, they come with various fees that can impact your financial health:

• Annual fee. Some credit cards, especially premium or rewards cards, charge an annual fee for the benefits they offer. This fee can range from $50 to several hundred dollars, so it's crucial to determine if the benefits outweigh the cost. The best credit cards can help you earn points or cash back with no annual fee. 
• Late payment fee. If you miss a payment or don’t pay at least the minimum amount due by the due date, you could be charged a late payment fee. This fee can also negatively impact your credit score.
• Balance transfer fee. When transferring a balance from one credit card to another, you may incur a balance transfer fee, which is usually a percentage of the amount transferred.
• Foreign transaction fee. Purchases made in a foreign currency or through foreign merchants may incur a foreign transaction fee, typically around 3% of the transaction amount. That’s why it’s important to keep a credit card with no foreign transaction fees in your wallet for travels abroad. 

Checking account fees

Checking accounts are a staple part of your financial life, but some come with potential fees:

• Monthly maintenance fee. Some checking accounts charge a monthly fee just for having the account. This fee can often be waived by maintaining a minimum balance or setting up direct deposits. However, there are free checking account options that may be more ideal. 
• Overdraft fee. If you spend more than what’s in your account, the bank may cover the difference but charge you an overdraft fee. These fees can be hefty and can add up quickly if multiple transactions occur. Be sure to review your bank or credit union’s overdraft options to ensure you’re covered in these “oops” moments. 
• ATM fee. Using an ATM outside your bank’s network can result in an ATM fee. Both the bank that owns the ATM and your bank may charge you for the transaction. The best credit unions have a wide network of ATMs so you can access cash at no cost to you. 
• Dormancy fee. The bank may charge this fee if you don’t use your checking account for a long period. 

Saving accounts fees

Savings accounts are designed to help you grow your money, but fees can eat away at your balance. These accounts share a few of the same fees with some checking accounts, including: 

• Monthly maintenance fee. Like checking accounts, some savings accounts charge a monthly fee if you don’t maintain a minimum balance. Be sure to do your research, as there are interest-earning savings accounts with no minimum balance or monthly maintenance fee. 
• Dormancy fee. If you don’t use your savings account for a long period, the bank might charge a dormancy fee.

Certificate fees

Certificates are a secure way to earn interest over time by depositing a lump sum of money with a bank or credit union for a fixed term, ranging from a few months to several years. The interest rate on a certificate is usually higher than that of a standard savings account because your money is locked in for the agreed period. While certificates offer guaranteed returns, it's important to consider potential fees.

• Early withdrawal penalty. Withdrawing money from a certificate before its maturity date typically results in an early withdrawal penalty. This penalty can vary depending on the term of the certificate and the financial institution’s policy.

The credit union difference

At General Electric Credit Union (GECU), we are committed to helping our members avoid unnecessary fees. As a not-for-profit financial institution, we prioritize our members over profits. This allows us to offer fewer fees and more favorable terms on our accounts. Whether you’re looking for a low-fee credit card, a checking account with no monthly maintenance fee, or a savings account designed to grow your money, GECU has you covered.