The 'hidden' bank charges everyone should know about
WE KNOW that our bank is likely to hit us with penalty charges for exceeding our overdraft limit, or for failed payments.
But unless we're used to incurring such fees - which is not a good sign, by the way - the price and how they're applied can come as something of a shock.
Then there are the charges for doing something more unusual, like having to stop a cheque or make a payment to a foreign account - and plenty of other banking services - that can catch us out.
It's not so much that these charges are hidden from us - details should be included in our terms and conditions, and available on each bank's website, but they're not always easy to find, or to understand when we do.
So to save time and quite a bit of effort, we've pulled together a list of some of the most common "hidden" or unexpected fees that banks charge, and how much they can cost.
Day to day charges
We'll start with the charges that feel really sneaky - those that have the potential to catch us out on a regular basis.
Technically speaking, it's not our bank charging us to use an ATM when we end up paying for them - unless we're using a prepaid card or credit card.
Taking out cash from an ATM is generally free of charge in the UK, thanks to the existence of the Link Network, which allows us to use our cash card in other providers' ATMs.
But of the 70,000 Link cash machines in the UK, around 17,000 - or about a quarter - charge the user to make a withdrawal with a debit or cash card.
These ATMs tend to be independently owned - the sort found in convenience stores and some garages - and will charge anything from £1.25 to £5 or more on transactions that include a withdrawal.
As for the two kinds of card mentioned above: some prepaid card providers charge their customers for making withdrawals wherever they do so.
Those withdrawing money using their credit cards will be charged a transaction fee by both the ATM owner and their card provider, as well as incurring interest on the money they've withdrawn.
Despite it being widely understood that going into unauthorised overdraft is to be avoided at all costs, this tends to be the biggest source of unexpected charges on our accounts.
If we do go into unplanned overdraft, we can expect to be charged a flat fee for the month, plus fees on attempted transactions or for every day we stay over our limit; each charge can be as much as £10.
The other danger is that we think we've avoided going into unplanned overdraft, only to be hit with charges at the end of the banking month anyway.
The most likely reason is that our bank has refused to honour a scheduled payment or bill because doing so would take us over our agreed borrowing limit or buffer - but then they've charged us an unpaid transaction fee, which can cost from £6 to £10 per item or per day.
Some banks cap the cost of any unplanned borrowing, but it's up to each institution at what level they set that limit: it can be as much as £100 a month.
Sometimes we need a little extra help from our bank: we're trying to get our finances in order ahead of a mortgage or loan application, or we've realised we wrote too many zeroes on that cheque for our nephew's birthday.
The bank will usually be more than willing to help - but in most cases they'll also charge us for helping us out.
Requesting a copy of a statement
As internet banking has become more popular and more of us have switched to paperless statements, we don't always have hard copies when we need them - especially we need to access records from more than a year ago.
A couple of banks will provide one additional copy of each current account statement free of charge, but most charge on a per statement basis. Expect to pay from £2.50 to £5 per request; some banks will cap the cost of requesting multiple statements at once.
Beware of requesting more than one regular statement per month: some providers offer this service, but it costs extra - from £2 for one per fortnight up to £20 or more per month for more than one statement per week.
Lost and stolen cheques and chequebooks - whether blank or written and signed - can usually be cancelled (or stopped) free of charge; it's like reporting a lost or stolen card and taking sensible steps to prevent fraudulent use.
If, however, we've written and presented a cheque safely and we simply want to stop the payment from being honoured, that will cost us: the standard fee is around £10 per stopped cheque.
Note that it's illegal to use a cheque as payment with the intention of stopping it later, or knowing that it will bounce.
When it's us receiving the cheque, and we want to be sure the payment will go through, most banks offer a service called special presentation.
It's basically a rapid clearing process: our bank either delivers the cheque more quickly than usual (hence "special presentation") or contacts the issuing bank to confirm the account is good for the money, and it costs around £15 to £20 a time.
Charges for large or unusual transactions
Then there are the charges banks levy for doing something we could possibly do ourselves, but for various reasons sometimes require a little more attention or administration than we can manage.
Bankers drafts are basically cheques written by the bank rather than us, and they're seen as more secure for larger sums such as mortgage or tenancy deposits, or buying a car. Requesting one will usually cost between £10 and £20.
Because they're basically superpowered cheques, there are often fees for requesting that one be stopped or cancelled, even if it's been lost or stolen. Charges vary, but £10 to £20 is typical, before factoring in any fees charged by the recipient's bank.
Bank to bank transfers
Most payments from bank to bank are made using one of three electronic transfer systems: Bacs (for Direct Debits, standing orders and the like), Faster Payments, and CHAPS.
When we set up a payment to a friend through online banking, it'll usually be sent via the Faster Payments System free of charge. If, however, the recipient bank doesn't take Faster Payments, a bank may offer to send it via the CHAPS system.
This is the service banks and building societies use to transfer money between themselves, and the preferred method for solicitors and licensed conveyancers when transferring the purchase price of a house between the mortgage lender and the seller's bank.
It's the electronic transfer equivalent of sending a bankers draft rather than a cheque - and like the bankers draft, it costs more to use. Organising and sending a CHAPS payment costs from £20 to £30 per time, depending on our bank.
We should be warned if a payment will need to be sent via CHAPS, and that there's a charge for doing so - but customers who've made the mistake once will need to be extra careful with future payments to the same recipient.
We're going to assume that people know about the non-sterling transaction fees they'll be charged for using their UK cards abroad, even if they do have the capacity to surprise and annoy us when they appear on our statements.
The foreign transaction fees that are less well known about, however, are those for sending or receiving money electronically, or banking a cheque made out in a foreign currency.
The most common non-sterling transaction method for sending and receiving money within Europe is the Single Euro Payment Area (SEPA) transfer system: banks charge up to £15 for payments made this way.
Other international payments are made using a variety of methods: as well as SWIFT, through which money can be sent almost anywhere in the world, banks with branches or business abroad may have their own transfer system.
Sending a payment can cost from £5 up to £40 depending on our bank, how high priority the payment is, destination, and whether the payment was made online or in branch.
Receiving money in a foreign currency can be expensive too, more so if we get it in the form of a cheque. Expect to pay at least 0.25% of the value of the cheque, subject to minimum and maximum fees that vary from bank to bank - and beware added charges for postage and agents' fees and the like.
By contrast, foreign currency transfers into our account tend to cost less than £10 per time - and some banks will waive fees on transactions from EU countries if details like the Bank Identifier Code (BIC) and IBAN are provided at the same time.