Ignorance of Banking Fees Will Cost You:
Most reputable banks will allow you to take home the documents and read them before you sign an agreement. Take advantage of this and do so. This also allows you the opportunity to check with other banks to see if you can find a better deal. For example, credit unions offer lower fees than banks. If you feel pressured to sign, or a bank won’t let you take the documents home, then you might want to reconsider doing business with that particular institution.
As a business owner, you might be seeking to open a line of credit with a bank. You should be aware that you may be charged a number of fees right off the bat, including an appraisal fee, a documentation fee, and additional miscellaneous fees depending upon any number of circumstances. There may also be annual fees, or fees for closing the account. The bank might not tell you any of this up front, but it is all in the documentation.
It’s very easy to blame the banks for many of our financial woes, but in many cases, we have no one to blame but ourselves. As a whole, we don’t often take the time to properly educate ourselves regarding many types of business transactions. From deceptive investment practices such as Ponzi schemes, to unaffordable mortgages, to not bothering to read the fine print about banking fees, many financial troubles could have been avoided if only we had utilized some common sense.
Is a No-Fee Account a Good Idea?:
To answer this, you need to do the math. You may have secured an account that charges no fees, but usually something else is required, such as keeping a minimum balance in the account, which bears little or no interest. This money might be serving you better in a CD or other higher interest-bearing account.
Online Banking Transactions May Subject You to More Banking Fees:
There is no doubting that online banking has facilitated the way we do business, but are you aware that engaging in certain online banking transactions can subject you to even more banking fees?
For example, suppose you have more than one bank account, in which you occasionally transfer money between accounts. Some banks limit the amount of online transfers you can make per month (in addition to other types of transactions), and then charge you a penalty fee if you go over that limit.
If you do not check your balance often, you may be surprised to find that you have incurred a penalty charge for each and every transfer over the maximum limit per month. Additionally, this may result in your account having insufficient funds for other transactions, which of course results in insufficient fund penalty charges.
Credit Card Transaction Fees:
Credit card transaction fees for business vary according to both the card issuer and the merchant account provider you have chosen. It is important that you understand how these fees will affect your profit margin.
You will be charged a percentage rate of the sale in each and every transaction: typically 1-5% depending upon the processor, but possibly as much as 15% by some third party merchant processors typically utilized by small business that at a higher risk for merchant accounts. There may also be a flat transaction fee charged for each sale, usually from.25-.50 cents per transaction.