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?
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