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If you’ve been looking for a rental of any kind, you know how tough the hunt can be. Dozens of applicants for each vacancy, stricter credit, income, and referral requirements from landlords, bidding wars. These are, unfortunately, all part of navigating today’s tough rental market.

The culprit is a national housing shortage that has been brewing for more than a decade. After the housing crash of 2008, new construction of homes and rental units slowed dramatically. An uptick in building was later offset by supply chain and other pandemic-related delays. Meanwhile, rising mortgage rates made owning a home less affordable, prompting lots of would-be buyers to stay put in the rental market. The result? During the height of the rental crunch in early 2022, apartment occupancy hit an all-time high of 97.6% and rents jumped an average of 15.2% throughout the country.

Although the rental market has cooled somewhat since then, rents remain high and lower-cost rental units are in especially high demand. About half of people who rent are considered cost-burdened, meaning they spend more on rent than the recommended 30% of income.

If you’re competing in a tight rental market — or just competing for an affordable rental to call home — these four steps can help you anticipate what landlords are looking for and help you present yourself as the ideal tenant.

Tips to Get Approved for a Lease

Step 1: Know Your Number

Determine just how much you can afford for housing costs.

The advertised or asking rent is just the beginning. You’ll also need to take any fees, utilities, maintenance, parking, and renters insurance into account. If it’s been a while since you signed a new lease, you may need to adjust your estimates for these costs upward. Moving to a new area? Whether you’re renting or in the market for a house (and a home loan), check out a cost of living by state breakdown to get a feel for the numbers.

Take into account the possibility that you might find yourself in a bidding war. In the heat of the moment, you may outbid the others but also end up with an apartment you can’t comfortably afford. To avoid this scenario, determine your ideal monthly payment and stick to that number, no matter how tired you are of the apartment hunt.

Step 2: Prepare Your Rental Resume

Apply for a rental the same way you approach applying for a job. You want to make sure you fulfill all of the requirements, and then some.

The first step to getting approved for an apartment is usually filling out an application online. Be sure to do so accurately and thoroughly. When the time comes to see the place, you’ll help make your case if you bring the following:

Copies of Your Credit Reports

Landlords routinely do background and credit checks on applicants they are considering. Offering a copy of a credit report gives them on-the-spot information. If something on your report is confusing, you can attach your own letter of explanation.

Most landlords will look for a good FICO® score (670 to 739) or higher. Find your credit score on a loan or credit card statement or through an online credit score checker. Or get it for free from Experian.

Proof of Employment and Income

Landlords want to know that you can comfortably afford the rent. To prove you can, you could bring copies of your past three to six months of pay stubs, a copy of your most recent tax return, and contact information for your current employer. (This may be more than the landlord is asking for, but it helps build your case.)

Some, but not all, landlords also require employment history information. Having a list of former employers and their contact information on hand can help speed up this process. Even if it’s not required, the list helps paint a more complete picture of why you’re a trustworthy candidate.

References

Be ready to present credit references, which may include character references and asset documentation. Personal references from your boss, a co-worker, or another nonfamily adult who can vouch for you are a good idea. The landlord or agent may not call these people, but having them on your list is a sign of your professionalism and trustworthiness.

Landlords probably also will want the names, locations, and contact information of any previous landlords. A stellar rental history can help put you ahead of the crowd, so you want to make it easy for the agent or landlord to check on you.

If you’ve had trouble making rental payments, it’s best to be honest and offer an explanation.

Documentation for Service or Assistance Animals

According to the Fair Housing Act, a person with a disability may seek a “reasonable accommodation” from a housing provider so that they may have an equal opportunity as a nondisabled person to use a dwelling, even one that otherwise does not allow animals. The disability can be physical or mental.

Service animals, defined as dogs, are not considered pets, and housing providers cannot charge fees or deposits for them.

So-called emotional support animals have ruffled feathers throughout the country. First, applicants with assistance animals must make a request for reasonable accommodation, and not necessarily in writing. If the disability is not observable, they must provide reliable information — typically a letter from a medical provider or therapist — to the housing provider showing that the animal provides assistance.

Beyond that, the U.S. Department of Housing and Urban Development (HUD) does not allow housing providers to seek personal details of a person’s medical history. Importantly, HUD says that online certificates alone are not sufficient to reliably establish that a person has a nonobservable disability or disability-related need for an assistance animal.

So if you have assistance animals, it’s a good idea to bone up on the laws, which can be complicated, and have professional documentation.

Step 3: Show an Interest

It may sound trite, but landlords and rental agents are reassured when they know that someone really wants to live in the property. At a time when demand is high, this can be even more important as landlords become inundated with calls or online requests.

If you’ve visited the property before, have a friend in the same complex or nearby, love the neighborhood, or even appreciate the architecture or amenities, be sure to say so. Landlords want to know you’ll enjoy living there and, in turn, take good care of your new home.

Step 4: Prepare to Pay

Many leases have been lost when an early and promising applicant is ready to rent but doesn’t have the funds available.

Make sure you bring your checkbook or an electronic payment option so you can pay your security deposit, first month’s rent, and whatever else is required immediately. And, of course, make sure you have the funds available, while still leaving room in your budget to also cover moving expenses.

Move-in money can obviously be a challenge to come up with. If it’s several thousand dollars, a personal loan could help.

Did you snag the apartment or house? Once you move in and exhale, undertake a few renter-friendly updates to help you make the space your own.

Recommended: How Home Ownership Can Help Build Generational Wealth

The Takeaway

It’s a challenging time to look for a rental. But preparing thoroughly before you start your hunt and taking steps to show landlords your qualifications and genuine interest can help you stand out in the crowd. In this rental squeeze, however, some house hunters may find that it makes more sense to build equity in their own home than to pay rent.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

How do I impress a potential landlord?

Make sure you fill out the rental application fully. When you tour the apartment, bring along a copy of your credit report, proof of employment and income, and contact information for some character references. Then express genuine interest in the property — comment on the building or neighborhood, for example — to show you’ll be invested in caring for your rental home.

What kind of background check do most landlords do?

A background check from a potential landlord might include a review of your credit history, employment and income history, and even a criminal background check. Some landlords also check for a history of eviction. They may also contact a former landlord or ask you for a character reference from a friend or colleague.

How much money should I have saved before renting an apartment?

You’ll want to have at least three months’ worth of rent saved before you start apartment hunting — the equivalent of your first and last months’ rent plus a security deposit. What’s more important, though, is that you have carefully considered the full cost of renting — including paying for utilities, renter’s insurance, and perhaps expenses such as parking. A good rule of thumb is that your housing expenses should not exceed 30% of your take-home pay.

Photo credit: iStock/cnythzl

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOHL-Q324-030

A price protection credit card benefit offers a limited lowest price guarantee on your purchases. If an item you purchased is advertised at a lower price than you paid, then you might be eligible for a refund of the difference if you paid using a credit card with price protection.

Although the idea seems straightforward, price protection credit card clauses aren’t as simple due to differences between card programs. Here’s a closer look at what price protection is and how it works.

What Is Credit Card Price Protection?

Credit card price protection is a card benefit that some programs offer their cardholders. It guarantees that if an eligible item you purchased using your credit card is advertised at a lower price, the card issuer will refund you the price difference.

To receive the funds, you’ll have to file a claim asking to be refunded — it won’t automatically get deducted from your credit card balance. It’s also up to the cardholder to be on the lookout for price fluctuations.

Recommended: When Are Credit Card Payments Due?

How to Use Price Protection

Credit cards with price protection are most advantageous when used toward a purchase that commonly changes in price. For example, this could include electronics, clothing, and other items that often go on sale.

There are also a few things to keep in mind when it comes to how credit cards work with price protection. For starters, to use price protection, the lower-priced item must be the exact specifications of your original purchase. This includes the product manufacturer, model number, and year it was released.

You’ll also need to ensure that the reduced price was advertised within the program’s specified timeframe, which is usually anywhere from 30 to 90 days and occasionally longer. Plus, you’ll need to file a refund request within the allotted claim window.

Questions to Ask Issuers That Offer Credit Card Price Protection

If you’re specifically looking for a credit card with price protection, make sure you know all of the terms associated with this benefit. Contact the card issuer upfront to get clarity about the eligibility requirements for filing a price protection claim.

What Items Are Eligible for Price Protection?

The range of items that are eligible for price protection under your card’s benefit program can be quite broad. For example, home goods, furniture, clothing, footwear, kitchenware, bedroom linen sets, pet accessories, and more might qualify under your price protection credit card.

What Items Are Not Eligible for Price Protection?

Below are some examples of goods that might be excluded from price protection, depending on your benefits program:

•   Animals

•   Antiques

•   Bespoke or one-of-a-kind items

•   Cash-only purchases

•   Collector items

•   Food and beverages

•   Discontinued items

•   Jewelry

•   Limited edition items

•   Live plants

•   Original artwork

•   Perishable goods

•   Tickets

•   Services and related costs

•   Vehicles

•   Watches

Further, items purchased at liquidation sales, storewide sales, or online might not be eligible for price protection. Also note that price protection isn’t the route you take if you’re simply unsatisfied with the service or product you received. In that scenario, you’d request a credit card chargeback.

Recommended: What Is a Charge Card?

Guide to Filing for a Credit Card Refund

If the advertisement you’ve found shows a lower price than what you paid for your original purchase, and your situation fits your credit card price protection requirements, you can submit a claim for reimbursement. To do so, you’ll generally need to go through the following steps:

1.    Save the lower-priced advertisement. Retain the original physical ad that shows the product’s name, merchant or retailer, price, and date, if applicable.

2.    Find your original receipt. The purchase receipt for the item you bought should include the merchant’s name, date of purchase, item, and price. It should also show that you used the credit card with price protection. You might also be asked to supply a copy of your statement that has the original purchase on it.

3.    Submit a claim. Contact your card’s Benefits Administrator, or call the number at the back of your card to file a claim for a price protection refund. Make sure that your claim is submitted within the eligible claim period.

4.    Review your balance. Check your credit card balance or statement to confirm that the refunded amount is correctly reflected on your account.

How long a credit card refund takes depends on your card issuer and its processing timeline. Generally, it can take five to 14 business days to see a refund posted to your account’s balance.

How Long Do You Have to File for a Credit Card Refund?

The timeline you have to claim a credit card refund under price protection varies between credit card programs. Some cards allow you to file claims up to 90 days after your purchase date, while others may give you longer.

Additionally, some benefits programs require that the advertisement date is within a certain number of days of your original date of purchase. Make sure to confirm the ad date requirement under the credit card price protection benefit, as well as the deadline to file a formal claim.

Is There a Limit to Reimbursement Through Price Protection?

Another restriction you might encounter for cards with price protection is the minimum and maximum refund limit per item. For example, your card might impose a minimum refund threshold of $10 up to a maximum refund of $250 per item. It also might have an annual reimbursement limit, which caps the total refund amount you can receive in a year.

If you want to file a refund claim under your price protection benefits, check your credit card’s benefits guide to learn about its specific requirements.

Recommended: What Is the Average Credit Card Limit?

Tips for Saving Money Without Credit Card Price Protection

Using a credit card with price protection isn’t the only way to save money when prices are reduced. Here are some other possibilities for saving:

•   Look for same-retailer price adjustments: Some retailers offer a price adjustment if you recently purchased an item in their store, and the same item is marked down at the same store not too long afterward.

•   Find price matches. To outprice their competitors, a retailer might offer a price match or lowest price guarantee. If you find the exact item elsewhere at a lower price, it will offer to match the price or offer a credit card refund for the difference if you’ve already purchased the item at their store.

•   Catch items on sale. Track upcoming sales, like a retailer’s annual sale or holiday sale, that offers a large discount off of the retail price. If shopping online, using an online price-tracking tool can help you find the lowest price.

•   Keep an eye on your credit card statements. While not necessarily a guaranteed path to savings, regularly reviewing your credit card statement can help you catch any charges that aren’t right, whether due to fraud or getting charged incorrectly. In those instances, you could dispute a credit card charge to attempt to get your money back.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

A price protection credit card offers peace of mind when purchasing goods that might fluctuate in price. It can allow you to claim a partial refund if there is a published price drop within a period of time after you make your purchase with your card and within the plan’s guidelines. Aside from applying to tangible goods, you may be able to take advantage of price guarantees for travel-related purchases like hotel rates, which can change daily.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What is price protection on a credit card?

Price protection allows cardholders to claim a credit card refund on a price difference if a lower published price becomes available. Typically, price protection is available for a limited period after the original purchase was made.

Do all credit cards offer price protection?

No, not all credit cards offer price protection. Card benefits, like price protection, vary across card issuers and credit card programs. See your card agreement to learn more about your card’s benefits and terms.

How can I use price protection?

In order to take advantage of price protection, you’ll first have to make a purchase using a credit card with price protection. Then, within the permitted time period, find the same product marked at a lower price and following the stipulations of your plan. From there, you’d contact your card issuer to submit a claim for a refund in the amount of the difference between the two prices.

What is a price protection clause?

A price protection clause is the written parameters of your card’s price protection benefit. It states the issuer’s criteria for claiming the benefit, including the allowable time frame for a price protection request, eligible purchase categories, and more.

Photo credit: iStock/jroballo

SOCC-Q324-027

When you’re ready to buy a house and need a home loan, a mortgage broker can help you shop for a mortgage, or you can go straight to a direct lender such as a bank or credit union and get the mortgage on your own.

Which way of shopping for a mortgage is better? If you have credit issues or other needs, using a broker to see an array of options might make sense. But if your financial health is solid and you want to save time and money, applying with a direct lender could be a good course of action.

In any case, it’s smart to get a few quotes and compare offers for the same type of loan and term.

What Is a Mortgage Broker?

A mortgage broker is like a personal shopper for home loans and serves as an intermediary between the mortgage seeker and lenders, including banks, credit unions, and private mortgage companies.

With a single application, a broker will provide you with access to different types of mortgage loans and, if you choose one, will walk you through underwriting.

Mortgage brokers are licensed and regulated. You’ll want to ensure that any broker you’re interested in working with is credentialed by checking the Nationwide Multistate Licensing System & Registry consumer access site. You can also check platforms like the Better Business Bureau and Yelp to see what past clients say.

Brokers are compensated by the borrower or lender. Borrower fees typically range from 1% to 2% of the total loan amount. Lender commissions may range from 0.50% to 2.75% of the total loan amount, but lenders usually pass the costs on to borrowers by building them into the loan.

How to Find a Mortgage Broker

You could ask your current lending institution, friends, family members, or real estate agent for a referral to a mortgage broker. After checking licensing, you may interview more than one broker before deciding on one. You might want to ask about their fees, lenders they work with, and experience.

What Is a Direct Lender?

In the mortgage broker vs. lender dichotomy, a direct lender is the bank, credit union, or mortgage company that originates, processes, and funds mortgages.

Mortgage loan officers, processors, and underwriters work for the company. Loan originators usually work on commission.

A loan officer may offer a mortgage at various price points, from a loan with discount points for a lower rate to a no-closing-cost loan, which is when the lender agrees to pay the closing costs in exchange for a higher interest rate.

Recommended: First-Time Homebuyer Guide

How to Find a Direct Lender

Most people have a relationship with a bank or credit union, so you can always start by getting a quote there. But there are myriad online mortgage lenders and it’s worth considering these options. Pulling up the day’s mortgage rates online will conjure a list of direct lenders advertising their rates.

What Are the Pros of Working With a Mortgage Broker?

Because they are able to offer a variety of quotes from different sources, brokers can be useful if you’re looking to easily compare mortgage options.

They may offer specialized loans, and because loan brokers set their own profit margins, negotiating could be easier.

A broker could be useful if you have concerns like a fair or bad credit score or student loan debt.

What Are the Cons of Working With a Mortgage Broker?

Brokers may have preferred lenders that don’t necessarily offer the best interest rate. If paid by lender commission, a broker could be tempted to steer a borrower to a more expensive loan.

If paid by lender commission, a broker could be tempted to steer a borrower to a more expensive loan.

Brokers’ loans may take longer to close.

Broker fees tend to be higher, but that could be because the mortgages offered are sometimes more complex. And mortgage brokers may charge borrowers directly (the fee of 1% to 2% of the total loan amount).

What Are the Pros of Working With a Direct Lender?

By working with a direct lender, you’ll skip the broker fees, and you may get a better rate with lower closing costs (although both lenders and brokers can offer “rebate pricing” — a higher interest rate in exchange for lower up-front costs).

A direct lender typically does all the loan processing, underwriting, and closing in-house.

You may be able to negotiate underwriting or origination fees.

What Are the Cons of Working With a Direct Lender?

Comparing rates and terms on your own from a sample of lenders takes time.

You’re limited to the loan programs of the institutions where you decide to shop.

What Works for My Situation?

You’ve probably toyed with at least one home affordability calculator and gotten preapproved for a loan.

Once you’ve found a home and your offer has been accepted, it’s decision time on a lender. You are not required to stay with the lender you used for pre-approval.

If you have a sparse credit history, subpar credit, or other challenges, a mortgage broker might be able to find a loan program that’s a good fit.

But if you have solid credit, a strong income, and assets, you may be able to save time and money by working with a direct lender.

What about rates? In weighing mortgage broker vs. bank, there might be no difference to speak of. The rate you’re offered depends more on your qualifications than on the lender.

The mortgage loan process can seem mysterious, and a broker or a loan officer at a direct lender can act as a loan seeker’s guide.

That guide should be willing to answer all of your mortgage questions, including those about points, fees, mortgage insurance, and the closing timetable.

You’ll receive loan estimates after applying. When comparing mortgage offers, it’s important to look at more than the interest rate. Be sure to compare annual percentage rates, or APRs, as well.

Look at the fees in the “loan costs” section, and compare closing costs.

The Takeaway

If you’re in the market for a mortgage, you might think the choice comes down to mortgage broker vs. direct lender. But you may get loan quotes from both and compare them. It’s called shopping, and a home is a rather important purchase. And as with any form of shopping these days, it’s easily done with a phone or computer, from the comfort of your couch.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

FAQ

Is it better to use a broker or a direct lender?

If you have a challenging credit score, or limited credit history, or other financial complexities, a broker might be the way to go. But if your finances are solid you may find going the direct lender to be the most cost-effective way to obtain a home loan.

Why use a mortgage broker instead of just going to a bank?

A mortgage broker can research possible rates from a wide range of lenders, which could save you time. And if you have a challenging financial situation or credit history, a broker might be able to steer you to a lender who will work with your profile.

Does a mortgage broker charge a fee?

Yes. A borrower may have to pay a mortgage broker’s fee of 1% to 2% of the loan amount. When the lender pays a broker a commission, it may range from 0.50% to 2.75% of the total loan amount and these costs are passed on to the borrower by being built into the loan.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

SOHL-Q324-031

Many people figure that paying bank fees is simply an unavoidable part of life. Recent surveys say the average American shells out anywhere from $167 to $288 per year in fees. But take note: Some or even all of those may be avoidable.

For many financial institutions, fees are a way that banks make money. They can help cover the cost of being in business, and they can also cover situations that require more of their team’s time (say, dealing with an overdrafted account).

However, these charges can become expensive for many customers, and they can eat away at any interest earned. That can foil a customer’s efforts to grow their wealth.

Next, learn about the specific fees that many banks assess and how you can lower or avoid them.

1. Monthly Maintenance Fees

One of the most ubiquitous fees banks charge for checking and savings accounts is the monthly maintenance or service fee. This is a fee you pay each month to cover the cost of account management and customer service. These fees typically run between $5 and $15 per month and are usually automatically deducted from your account.

How to avoid monthly maintenance fees: Some banks offer account holders ways to get these monthly service fees waived. Common waiver requirements include: maintaining a certain minimum monthly balance, completing a certain number of debit card transactions per month, or receiving a specified amount of money via direct deposit for each statement period.

2. ATM Fees

Both traditional and online-only banks typically offer a network of ATMs where you can make deposits and withdrawals free of charge. If you deposit or withdraw money at an ATM outside your bank’s network, however, the bank will typically charge you am atm fee. On top of that, the owner of the ATM will likely also tack on a charge. On average, total combined ATM fees run close to $5.

How to avoid ATM fees: To reduce how much you could pay in ATM fees, planning ahead might help. You could research locations of in-network ATMs and only make withdrawals there. Or use an ATM that’s in-network to get cash before you go shopping or out to eat at a cash-only location so you don’t have to use whichever ATM is nearby.

Here’s another idea for avoiding ATM fees: Many grocery stores and some big box stores will let you get cash back when you make purchases there. This could be another way to circumvent ATM fees.

3. Overdraft Fees

The average overdraft fee runs around $27.

How to avoid overdraft fees: Many banks offer overdraft protection as an add-on service. If you choose to opt in, the bank will allow transactions to go through, even if you don’t have sufficient funds in your account to cover them. Depending on the type of overdraft protection you sign up for, the bank may lend you the money to cover the overage, or they may pull funds from a linked account. This can avoid NSF fees, late fees, and bounced check fees, but can trigger an overdraft fee.

Recommended: Overdraft vs. NSF Fees

4. Nonsufficient Funds (NSF) Fees

Nonsufficient funds (NSF) fees, also known as insufficient funds or returned item fees, can occur when a bank declines to make an electronic payment or cash a check that would bring your checking account to a negative balance. Instead, the transaction gets denied or returned unpaid and the bank will typically charge you an NSF fee (also known as a returned item fee). The average NSF fee is currently around $20.

If you don’t opt in to have overdraft protection on an account, banks typically decline, or bounce, the transaction if there aren’t enough funds to cover a transaction.

Besides the problems associated with a bounced check (that is, the payee not getting their funds), there is typically a returned item fee, averaging around $30 for each occurrence. And, unfortunately, sometimes a returned item fee can take an account balance to the point where another check may bounce, causing the situation to become increasingly worse.

How to avoid nonsufficient funds fees: Many banks allow you to sign up for text alerts that let you know when your balance has fallen below a certain level. When you get the alert, you can avoid making a debit card purchase that will overdraw your account. You can also quickly transfer funds to cover any impending automatic payments or outstanding checks.

5. Wire Transfer Fees

If you use your checking account to send or receive a wire transfer, you’ll typically pay a wire transfer fee. Fees vary by institution, but they are usually at least $20 for domestic transfers and $35 or more for international transfers. Some banks don’t charge you for incoming wire transfers (when someone sends you money), but others charge a wire transfer fee whether you are sending or receiving funds.

How to avoid wire transfer fees: A few ideas on avoiding these fees, if your financial institution charges them: Ask your bank if they will waive the surcharge; in some cases, they may. Use a payment service like Zelle, or, if you often make and receive international payments, you might look into getting a multicurrency or foreign currency bank account.

6. Inactivity Fees

If you have a bank account that you don’t use often, you might get charged what’s known as an inactivity fee or a dormancy if it sits untouched for a while. There are varying state laws that specify when a bank must turn dormant funds over to the state, as a form of unclaimed funds. Dormancy fees try to trigger account holders into action so that this handoff of funds to the government doesn’t happen.

Inactivity fees can typically range from $5 to $20, and the amount of time that must elapse before they are assessed will vary.

How to avoid inactivity fees: To avoid these fees, it’s wise to only have as many accounts as you can frequently manage. If you have an account you barely use, it can be a smart move to close it and transfer any funds to an active account.

7. International Transactions Fees

If you travel outside of the U.S. and use your debit card to make a purchase or withdraw funds at an ATM, you may get hit with an international (or foreign) transaction fee. These fees are typically up to 3% of the purchase or withdrawal amount.

How to avoid international transaction fees: To help mitigate or avoid these bank fees (especially if you are a frequent traveler), you could check with your bank to see if it charges these fees. If it does, you might consider opening an account at a financial institution that doesn’t.

Also, perhaps your bank has affiliate banks in regions where you’re traveling, and you could withdraw from those ATMs without paying the additional international fees. You could also ask if your bank reimburses fees that you’ve paid.

You could exchange US dollars to foreign currency before you leave the country, perhaps eliminating the need for ATM withdrawals while traveling. Your bank might do this with no fees. However, then you do risk loss or theft of your funds.

Recommended: Can You Use Your Debit Card in Another Country?

8. Paper Statement Fees

Many banks have shifted to e-statements in an effort to reduce waste and save on printing and mailing costs. If you choose to receive paper statements for your checking account, you may get hit with a monthly surcharge, which is often around $2.

How to avoid paper statement fees: Switching to electronic statements can help you avoid monthly paper statement fees. Banks typically allow you to sign up for this option through their online banking platforms. If you prefer a paper format, you can always print out your e-statements.

How Are Checking Account Fees Changing Over Time?

Along with the rising cost of many consumer goods and services, many checking account fees have also increased in recent years. This includes monthly account maintenance fees and ATM fees, along with higher balances required to avoid the fees. But there is some good news: Two common checking account fees — overdraft and NSF fees — have been moving in the other direction.

According to Bankrate’s annual checking account and ATM fee study, the average overdraft fee in 2023 was $26.61, down 11% from $29.80 in the previous year. In that same time period, the average NSF fee dropped a full 25%, from $26.58 in 2022 to a record low of $19.94 in 2023.

Despite the drop in average amounts, overdraft and NSF fees are still charged by 91% percent of accounts and 70% of accounts, respectively, according to the survey.

The Takeaway

Many checking accounts charge fees for everything from keeping your account open to overdrafts to ATM usage. Fortunately, you can avoid many of these charges by keeping a certain minimum balance in your account, signing up for direct deposits, going paperless, or looking for a bank that charges lower, or no, fees for checking accounts.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQs

Are there fees for checking accounts?

Yes, checking accounts often come with various fees, including monthly maintenance fees, overdraft fees, ATM fees, and fees for paper statements or nonsufficient funds. These fees vary by bank and can add up over time if you’re not careful. Some banks offer fee-free checking accounts, but these might have specific requirements like maintaining a minimum balance or setting up direct deposits.

How do you avoid checking account fees?

You may be able to avoid or minimize checking account fees by:

•   Maintaining the required minimum balance

•   Signing up for direct deposit

•   Using your debit card a certain number of times per month

•   Using in-network ATMs

•   Opting for electronic statements

•   Setting up low-balance alerts (to avoid overdraft and nonsufficient funds fees)

•   Choosing a bank that offers fee-free checking accounts

What is the most common checking account fee?

The most common checking account fees include:

•   Monthly maintenance fees (these may be avoidable by keeping a certain minimum balance or signing up for regular direct deposits).

•   Fees for using out-of-network automatic teller machines (ATMs)

•   Overdraft fees

•   Nonsufficient fund (NSF) fees

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The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at sofi.com/legal/banking-fees/.
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