Banks add sneaky fees
Consumers may have won a battle when the big banks dropped their proposed debit-card fees earlier this year, but the war is far from over.
Think consumers won the war when the last of the big banks dropped their proposed debit-card fees at the beginning of November? Guess again.
Many banks have found "under the radar" ways to charge customers for holding their accounts, and to make up the income they lost when the Federal Reserve capped debit card fees in June.
Some of the fees are new, and others are increases of existing fees. The banks are not adding these new fees specifically because their debit-card fees were shot down; they've been adding them anyway.
"Banks tried the in-your-face fee with debit cards, and consumers said enough," Alex Matjanec, a co-founder of MyBankTracker.com, told The New York Times. "What most people don't realize is that they have been adding new charges or taking fees that have always existed and increased them, or are making them harder to avoid."
Some of these fees:
- $5 to replace a lost debit card fee, plus $20 for rush delivery at Bank of America;
- $15 for a wire transfer fee at TD Bank;
- $10 per month for basic checking at Citigroup, up from $8;
- $12 per month for basic checking at Bank of America, up from $8.95;
- 50 cents per deposit via cell phone at U.S. Bancorp.
In addition, average interest rates have declined at all banks, from 0.8% to 0.74%, the Times reported.
Some fees may suffer the same fate as those proposed debit-card fees, however. Chase this week pulled tests of two monthly checking-account fees. One was a $10 fee being tested in Oklahoma for new customers, which could not be waived through direct deposits or online banking, and the other was a $15 fee being tested in Atlanta that required customers to keep a minimum daily balance of at least $1,500, according to CNN Money.
Big incentive for big banks
The banks have reasons for the fees, of course. The average customer costs Bank of America $200-$300 per year in maintenance costs, according to The New York Times.
Anticipated revenues for big banks dropped when the Durbin Amendment went into effect last month, capping debit-card swipe fees at 21 cents per transaction -- down from 44 cents. This will cost big banks approximately $9.4 billion per year, according to a study by Cardhub.com.
The proposed debit-card fees looked like a sweet way to make up that money, and more, with the potential to bring in $875 million per month, according to an analysis (.pdf file) from Market Rates Insight. Post continues below.
The Credit Union National Organization reported 700,000 new credit union members and $4.5 billion in new deposits in the past month, which may have come directly out of big banks.
What can you do?
As the banks often point out, a lot of their fees have little to no impact on customers who maintain minimum balances, don't incur overdraft charges and opt for paperless statements.
Some possible ways to avoid paying bank fees:
- Keep all of your accounts in one bank, CBS News recommends.
- Move your checking and savings accounts to the bank where you have a mortgage, or consider refinancing and use it as an opportunity to negotiate free checking.
- Some banks waive minimum-balance requirements if customers sign up for direct deposit, or paperless statements. Find out if this is true at your bank.
- Study your bank's overdraft protection rules. Sometimes it only applies to accounts that maintain a certain minimum balance.
- Keep an eye on your account balance, and keep your check register current with not just the checks you right, but also your electronic transactions, the Federal Reserve recommends.
Or maybe you can organize a protest, like Kristen Christian, who's credited with starting the Bank Transfer Day movement that encouraged people to send a message to big banks and move their accounts to credit unions on November 5. Though it's impossible to measure the day's impact, the Bank Transfer Day Facebook page counted nearly 36,000 fans and more than 73,000 people who said they would "attend" the event.
What do you think? Are you still with a big bank, and what are your plans for coping with the new fees?
More on MSN Money:
"Bank of UNAmerica estimates each customer costs $200-$300 in yearly maintenance expenses to the bank."
Oh, boo hoo hiss cry me a river. Bank of UNAmerica gets money at 0% from the government, uses the money people put on deposits on investments making 6-10%, pays those same people 0.07%.
Then pays out 4.4 BILLON DOLLARS in 2010 for just BONUSES to the fatest pigs in the company.
I think it is time for several more "Bank Transfer Days." If the banks don't want their customers who cost them a couple hundred a year.... I have YET to hear one CREDIT UNION make any public complaints about how much their customers cost them.
Oh yeah. Credit Unions don't pay BILLIONS every year in BONUSES to the people who run them. I forgot. They live in the world of reality along with the rest of the 90% of us.
Just wanted to point out the misuse of the word right under the What can you do? section.
"...not just the checks you right,.."
Dealing with crooked bankers is an everyday chore. These criminals keep getting away with stealing our hard earned money. The more we give them the more they screw us and if we complain they add more penalties. We bailed them out and put them back into business with our money and now you see what they're doing to us. This of course is done with the help of our politicians. So as you can see they also have a license for doing what they do to us and get away with it. We are in a **** of these 2 entities.
Shop for banks as you would any service or product. There are plenty of small local banks and credit unions that would love to have your money. They offer many of the services the larger banks do, without the charges, and you keep your money local. This is good for your local economy.
Far be it from me to defend banks (I've already closed my personal checking acct at SunTrust because of their new fees and promised to move my business acct the first time a charge for some new fee pops up), but I wouldn't call the five listed fees 'sneaky'; whether or not they're necessary is debatable.
But I love this:
"Chase this week pulled tests of two monthly checking-account fees..."
Tests? Really? What think-tank came up with that test?
"Hey Joe, let's test this. Let's see if everyone will just give us money every month."
"Great idea, Bob. How much?"
"Well, let's test $5 a month."
"But Bob, that's not much."
"Joe!, Duh! We'll go up later."
"Brilliant! No wonder you pull the big bucks."
I'll tell you what's being tested: Our patience.
"I'm not sure why everyone is so upset. Why does everyone think they are entitled to free checking or no fees?"
I'll tell you why, at least from my perspective. These "Banks" (I'm sorry I view them more as money laundering brokers) make claim that each customer costs them $200-$300 a year? Can you please tell me how much money we MAKE them per year based upon how they INVEST MY MONEY after it's been deposited with them? Based upon their model, if they charge us for what WE "COST" them, then clearly, we should be getting dividends on what we MAKE them....do you with your $775? I know I do not.
@ spotmefive -
I hear you. I just had Bank of America reverse a $12.00 fee. They attempted to charge me for receiving a wire transfer!
In the article: With the checks you 'right' - Please - It should be - with the checks you 'write' - Do you realize how many people are going to read this? Shouldn't someone know how to use the correct wording? And: I think we pay enough to the banks as it is: They use our money while it's in the bank and forget earning anything on savings. I no longer have any faith in the banks. I had a savings account for my grandson through direct deposit and when I retired and was dealing with paperwork there was a delay in the direct deposit. The bank started taking money out of the savings account. I closed the savings account.and stopped dealing with that bank.
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