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How to Negotiate Service Fees with Your Bank

Posted on 18 Feb 2015 by Shammika Munugoda

How to Negotiate Service Fees with Your Bank

When it comes to dealing with banks, most of us just take for granted that their rules are inflexible. After all, they’re million-maybe even billion-dollar institutions and we’re one of perhaps as many customers. It can be intimidating or even embarrassing to ask them to bend the rules for us, despite the fact that we’re loyal customers and, as the saying goes, we should always be right. The good news, though, is that negotiating with banks can work, even when it comes to something as “set in stone” as service fees. Consider the following the next time you’d like to save some extra money and you may find yourself able to negotiate much better deals in the future.

No Amount Is Too Small

One misconception about negotiating fees with your bank is that there are some amounts that are just too small to matter. If you try to cash a check that had a stop payment put on it, you may get charged something in the neighbourhood of $7. Who cares, right? Why even bother contesting that amount?

Well, for one thing, depending on your savings account total, that could be a large chunk of what your interest would have been for the year. Isn’t part of the reason you keep your money in a savings account because you hope interest will help make it worth it?

Plus, banks are far less likely to rebuff your attempt to recover $7 than they would be a far greater amount.

Don't Be Scared to Do It

There really aren’t any consequences to at least asking your bank to waive a fee or refund a certain cost. What’s the worst that can really happen? They say, “No.” 99% of the time, the person you’ll be speaking with is some customer service specialist. So it’s not as though you’re going to run the risk of insulting the bank Vice President and being asked to leave.

Some studies have found that women often make far less than their male counterparts not because of some kind of institutionalized sexism, but rather because men are more likely to push for more money and negotiate for it. Because women are less likely to do so, they actually end up undercutting themselves.

So don’t let fear keep you from taking a chance that could payoff. The worst case scenario is hardly something to lose sleep over and the alternative could actually end up saving you some money.

Always Mention the Competition

Just because they have all the money doesn’t mean banks are necessarily faring too well at the moment. The recession wasn’t especially kind to them either. As such, they don’t want to lose any customers. Even if you don’t have an especially large sum of money with them, most banks know it’s not worth losing a modest sum of money to retrieve far less on a service fee.

So before beginning any negotiation, make sure you do a little cursory research about competitors. Find ones that charge less for whatever you’re being asked to pay for and even look into other things like what their annual interest rates are or what they demand for minimum balances. This is all leverage you can use. Again, what’s the worst they can counter offer with? Making you pay the service fee and then watching you take your money and leave.

Is This Your First Time?

You should feel especially emboldened to get fees waived if this is your first time with a certain transgression. Did you overdraft, for example? If it’s your first time, you can count on the bank actually being surprisingly sympathetic. Again, they don’t want to tick off an otherwise good customer.

After you first offense, you can expect a bit more of an uphill climb. However, this doesn’t mean all hope is lost. Ask them if they’ve ever waived for a second offense before. Or ask them if they’ve ever waived a first offense that was for more than your two offenses combined. You don’t have to be rude, but these simple words, said aloud, could magically save you some of your heard earned money.

Never take any service fees with your bank lying down. Using an ATM is always going to cost you a small sum, but other than that, take the attitude that everything else is up for negotiation. Then, keep the above tips in mind and give it a shot.

Shammika Munugoda

Shammika Munugoda

Founder and CEO

Software engineer Shammika Munugoda is the founder and CEO of Boomeringo.  In 2005 Shammika arrived in Melbourne as an international student from Sri Lanka. Being an international student meant Shammika was only allowed to work a maximum of 20 hours per week. His years as a financially strapped student were an influencing force in the development of Boomeringo. Shammika’s vision is to make financial management simple, easy and accessible to everyone in Australia.