Yahoo Finance has an article courtesy of Smart Money describing five sneaky overdraft traps that banks use on customers.

Times are tough for banks right now, so they’ll do anything to increase revenue, and bank fees are the easiest way to fatten their bottom line. According to the article, banks collected over $17.5 billion dollars in overdraft fees last year! That’s sick. It’s money thrown down the toilet on unnecessary bank fees. I have never paid an overdraft fee in my life. I’ve had it happen to me before. One time, I had three overdraft fees all at once, because of one of the traps that I will discuss later on. I just call up the Bank of America customer service, and they always end up taking off the fees. It pays to have an account with one bank for eight years.

Here are the article’s five sneak fee traps:

1. Debit and ATM Cushions

2. Reordered Debits and Deposits

3. Extended Overdraft Fees

4. High Daily Maximums

5. Funds on Hold

The reordered debits and deposits trap has tricked me in the past. For instance, if you have a debit for $5, then $45 dollars, then $50, then $8, and lastly $10, you would have two overdraft fees if assuming $100 was originally in your account. But, banks like Bank of America will “reorder” your debits from highest to lowest, and this would cause you to overdraft THREE times, rather than two. They justify it by saying that your higher debits are more important such as a mortgage payment, and they want to make sure those debits don’t bounce. It’s bull crap. It’s simply a way for them to maximize their overdraft fees.

Ways To Avoid Overdraft and Bank Fees:

• Budget your money before you spend it. You’ll never worry about overdrafting your bank account if you spend all of your money on paper first.
• Elect for overdraft protection with your savings account. Many banks will only charge you $5 or $10 dollars rather than $35 dollars to take money from your savings account to cover funds in your checking account if you overdraft.
• Use more cash and less of your debit card. The debit card is a great product, but it can be very dangerous. It’s so easy to swipe it at will and not keep track of all of your purchases. Take cash out for miscellaneous purchases, entertainment, and eating out.

Avoiding bank fees and credit card fees are the easiest way to save money over a lifetime. Don’t be a part of the $17.5 billion dollar statistic. And remember, pick up your phone and call customer service if you do get an overdraft fee charged to your account. Many banks are willing to waive the fees to loyal customers!