Many of us have multiple banks accounts, credit cards or loan commitments such as a car loan or a mortgage. While you might be aware of the usual fees charged by our banks, such as processing fees or charges for a new chequebook, there are other minimal costs you should be beware of. If ignored, such insignificant amounts can add up to a considerable amount of money. Here, Souqalmal.com lists the bank fees you can easily avoid to reduce the expenses on your account:
Maintain your minimum balance
Most UAE banks charge around Dh25 per month if the balance in your current or savings account falls below the minimum average monthly balance requirement. This fee can be easily avoided by staying up to date with your account activity through regular e-statements or online banking.
Limit your ATM usage
Avoiding making ATM cash withdrawals from banks other than your own to avoid additional costs. Banks charge a standard fee for cash withdrawals from ATM’s owned by other banks inside and outside the UAE. For example, when using another bank’s ATM in the UAE, you will be charged Dh2 for cash withdrawals and Dh1 on balance inquiries. You will be charged Dh6 on cash withdrawals and Dh3 on balance inquiries for using another bank ATM’s in GCC countries. The fees for withdrawing cash from any other international ATM is Dh20 along with a 2 per cent processing fee.
Avoid standing instructions fees
If you have set a regular standing instruction or order for payments towards utility bills, loan instalments or rent, make sure to check the costs associated with setting it up. Most banks in the UAE charge around Dh50 for setting up a standing instruction. Make sure you maintain sufficient funds in your account for the date when the standing instruction transaction is due. If your transaction gets declined due to insufficient funds, you will be charged about Dh25 per failed transaction.
Don’t delay loan instalments
Banks can charge a late payment fee of anywhere between Dh50 to Dh200 on a personal/auto loan and an even higher Dh500 to Dh1,000 on mortgages. Besides this, they may also charge a penal interest rate on top of the regular interest rate, on the delayed instalment amount. Bear in mind a delayed instalment may also raise a red flag and affect your credit report, hampering your chances of getting a loan at a competitive rate in the future.
Don’t withdraw cash from your credit card
The cash advance feature allows you to withdraw cash using your credit card through ATM’s or over the counter at a bank. Generally it isn’t a good idea to use your credit card to withdraw cash as most providers impose a hefty cash advance fee of up to 3 per cent. There is no interest-free period and interest starts accruing from the date of the transaction, and can be higher than the standard interest rate on your card.
Foreign exchange fees
These are charged on your credit card purchases abroad or in a different currency. They usually range from 1 per cent to 3 per cent of the transaction amount. You will also be charged a conversion fee by Visa or MasterCard. If you’re a frequent traveller, and are looking for a travel credit card, check this fee before applying.
Early closure of accounts
Most banks charge their customers a fee to discourage them from closing an account before a certain period. In the UAE, many banks charge around Dh100, if you choose to close your account within the first six months or a year.
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