While it’s not too difficult to understand a checking account as far as its purpose goes, many consumers fail to understand that a checking account is a product, and banks and credit unions can offer similar services with very different costs.

The first thing to consider is the the lifestyle you live. Are you a traveler? Do you travel internationally? These can be among the largest fees connected to a checking account when using a debit card or ATM to access your account.

If the answer to those questions are you don’t travel much and your decision for a checking account would largely be based on local use, then you can look at costs from that point of view. If you do travel a lot, the question then becomes what type of fees would be accessed if you were making overseas transactions with your account. It’s well worth the time spent to find these things out, as the cost differences between bank checking accounts can be huge.

Another major factor in determining which bank to have a checking account with is what types of fees are associated with using an ATM. Some banks will pay you back usage fees, while others charge for their use. Again, it can make a big difference in the costs connected to your checking account, so understanding those fees, if any, are important too.

One of the more important parts of checking today, as far as I’m concerned, is whether it offers online banking transactions. I’ve been doing online banking for years, and would have difficulty doing it any other way at this time. Large banks will have this, but possibly not all small, local banks. So it’s definitely worth asking the question and not assuming its part of the bank’s services offered.

What’s particularly effective and valuable about online banking is you can keep up to date on where your account stands far better than simply waiting for a monthly statement to arrive in the mail. If there is anything that doesn’t seem right, you can check it far quicker online than you can once a month.

Finally, be aware of overdraft protection and charges. Most banks offer overdraft protection, which has recently become a negative practice for them based on people claiming they had no idea they were covered for overdrafts.

The consequences of not knowing is a large number of fees which can add up quickly. You should ask if you’re covered by overdraft protection, and what the price of that service is if you overdraw your account. Each overdraft can cost a lot of money, so it can quickly rise to over $100 if you don’t pay attention to your account.

One thing you can do to protect yourself from these fees is to simply opt out of the program if you’re not careful in monitoring your account. If you do that though, you have to understand you’ll end up doing a transaction somewhere where it won’t be allowed to go through.

As you can see, opening and using a checking account can be a little more complex than you think, but it’s not rocket science. Just ask the right questions and be aware of fee structures and guidelines the banks offer.

From there take account of your own behavior patterns and make decisions based upon that. If you’re good at managing your affairs, then using the features available for a checking account is the best option. If you’re not, then utilizing the basic features of the account would be best for you, as it would save you a lot of money in the long run.

Tags: checking accounts

This entry was posted on Wednesday, December 2nd, 2009 at 5:20 pm and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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