From ATM fees to bounced-check charges to credit-card late fees, financial institutions have come up with just about every way imaginable to squeeze another buck out of their customers.

The fees have become so numerous and so high that in some cases they have become a political issue. In San Francisco and Santa Monica, Calif., voters have taken to the ballot box to try to quash ATM fees, and there are periodic efforts in Congress to prohibit banks from imposing one kind of fee or another.

These efforts have found only mixed success. The courts have knocked down some--the California anti-ATM-fee measures are already being challenged--and in other cases banks have come up with new and different fees to make up for ones they lost or have seen capped.

And psychologically satisfying though these referendums and other measures may be, the average consumer can do something far more economically effective: shop.

The financial services market remains large and diverse, and it offers the careful consumer a number of avenues to cheap service. The choices include not only big banks and small banks but also non-bank banks, savings banks, credit unions, and even mutual funds and stock brokerages.

With a little work, the majority of consumers can find an institution, or several of them, that offer the services they need for modest charges or even free.

The work is well worthwhile, according to a recent study by the Consumer Federation of America. The CFA, in conjunction with the Credit Union National Association, calculated that a smart shopper for financial services can save $100 to $200 a year compared with a less well-informed consumer who pays little attention to the costs of checking accounts, automated teller machines, credit cards and other services.

And the savings go on year in and year out. The consumer must, of course, remain alert for changes in terms, but in most cases the upfront shopping keeps on paying dividends.

The average household spends about $250 a year on such routine financial services, and "greater awareness and attention can reduce that by over half," said Stephen Brobeck, CFA executive director.

How and where to get the best deal depends to a large extent on the kinds of services you use.

On average, credit unions charge the lowest fees for common banking services such as checking accounts, but not everyone is eligible to join a credit union and credit unions do not provide some sophisticated banking services.

Also, for some services, such as ATMs, credit unions may be more costly. This is because many credit unions are very small and cannot afford their own terminals. To offer the service they must contract with other institutions, which impose their own fees.

So the first step is to look at the banking services you use and analyze how you use them. Ask yourself such questions as whether you carry a balance on your credit card, whether you pay your bills promptly, whether you use ATMs frequently, whether you keep large sums in you checking account, and whether you are likely to bounce checks, receive bad checks or need to stop payment on checks.

Then look at the your current services.

Usually the biggest savings can be found on credit cards. If you carry a balance, it will pay to shift your account to a low-interest card. (It will pay even more to get rid of the balance altogether, so don't look at the interest rate alone. Focus also on paying it off.)

Also, since card issuers have become much more aggressive in imposing fees, make sure you know your card's limit so you don't exceed it and incur and over-the-limit fee. Then pay the bill promptly so you don't get hit with a late charge. The CFA estimates that if all cardholders paid their bills immediately, they would save a total of $4 billion a year in late charges.

Now, on to your bank account. For many families, the interest paid by banks on checking accounts isn't worth the fees they charge and minimum balances they require. A better bet is to stow any excess cash in a money-market mutual fund and find a no-fee, no-minimum checking account for day-to-day transactions. Many money-market funds offer checking with $250 or $500 minimum amounts, so it's easy to shift funds when you need them, and a growing number of funds offer unrestricted checking.

Some banks offer "sweep" accounts that shift funds around automatically to cover your checks and give you higher interest. Ask about these, but look carefully at interest rates and charges.

If you are a big user of ATMs, ask about fees. Most banks don't charge customers for use of their own ATMs, so find out where they're located.

A bank with convenient ATMs can save you a lot of fees. The CFA figures consumers would save $10 billion annually by using only their own bank's ATMs.

The best way to deal with many bank fees is not to incur them. Balance your checkbook regularly so you don't bounce checks. If your account does have a minimum balance, be aware of it and try to remain above it.

Some fees are tough to avoid, though. Many banks now charge if you deposit a check and it bounces. If that happens to you more than very occasionally--say you have a rental unit and a tenant who doesn't balance his checkbook--look for an institution that doesn't charge much on that.

Credit unions are very popular in the Washington area. These are membership cooperatives, built around employment or some other "common bond." If you work for a large company or the government, you may well be eligible.

If you aren't eligible--or even if you are--check out small neighborhood banks. Even in the era of bank consolidation, a surprising number of these still exist, and many have lower fees and better service than the big regional or national institutions. These banks don't seem to resent it if you want to deal with a live teller instead of an ATM or an answering machine. They are also places where you can really get to know your banker and vice versa, and where they can tailor services to meet your needs.

Big banks, of course, offer a wide range of services and have branches across the region or the nation. So if you travel a lot, or need very sophisticated services, they may be your best bet. But at many of them, you should be prepared to pay more for ordinary banking.

Rising Fees

Annual fees for credit cards have leveled off, but issuers have become more aggressive in imposing other types of charges.

Annual fees

1997 1.3

1998 1.4

Penalty fees

1997 3.9

1998 4.8

Cash advance fees

1997 3

1998 4.1

SOURCE: Credit Card News