“I went like a pound over,” swears Ben Patterson, 19, about his emergency purchase of two pints of cider. But that trigger
ed a £35 fee from his bank – shocking, I know!
Going overdrawn is something you can’t afford to do as a student (or graduate), so here’s how to stop getting crushed by these charges.
Overdraft Fee
Trigger
Any time withdraw cash from an ATM, pay a bill online, write a cheque, or make a debit card purchase that exceeds the amount of money in your current or student account.
Cost
About £30, or higher for repeat overdrafts.
How to avoid
Know your current account balance and overdraft limits, especially before you plan to spend. Check via the ATM, online or even in the bank itself.
If you get charged and it’s your first time over the limit, go into the bank and beg for forgiveness and mercy. They will usually give the money back, just tell them it won’t happen again and make sure it doesn’t!
ATM Fees
Trigger
If you use a dodgy cash machine in a pub or club or in the middle of nowhere, it will usually charge you to get money out.
Cost
£1.50 to £3.
How to avoid
Plan ahead! Get cash out at the beginning of the week and don’t go over your budget. Don’t get money out when drunk and even ask to borrow money if you have to. If you use one of these machines once a week it could add up to over £100 for the year.
Late Payment Fee
Trigger
If you have a credit card (which you shouldn’t have as a student) but may have one as a graduate, then you’ll get charged if you don’t make the minimum payment on time.
Cost
£30 to £40 per late payment, and it will also effect your credit score.
How to avoid
If you pay your bills online, program an automatic payment and schedule it to arrive two to three days before the due date. With most credit card companies you can set up text reminders.
Going Over Your Credit Card Limit
Trigger
Going over your credit card limit it really not good, not good at all. A jump from 11 percent to 35 percent is not uncommon, Any time you’re maxing out your card, it’s really shocking news for your credit score. It can cause rejected loan applications and higher interest rates for mortgages which you’ll need one day.
Cost
About £35 on average, plus a likely jump in your card’s interest rate.
How to avoid the charge
Always be aware of your credit-card balance and know the exact consequences if you go over the limit. Sign up for account alerts so that your credit card company will alert you by e-mail or text message when your account is close to tipping over the edge of your limit. If you’ve already crossed the line, call your credit card company immediately. Customer service reps have been known to bump up credit limits for reliable, aware cardholders and punish the ignorant ones.
What you can do when you’re slapped with a fee?
Call the customer service department. Be calm and put a nice tone to your voice – ask nicely! Get the facts, then stick to your guns and follow up if you feel you’re being ripped off.
Research the competition and pay some attention to balance transfer rules. If your credit card company doesn’t come around, vote with your scissors, make the switch, pay off the balance, and cut it up. But don’t close the credit card down, because it will affect your credit score.
Now please, avoid getting these charges! The UK racks up tens of millions of £££ in unwanted charges, don’t give the banks what they want!