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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.

By Giselle Smith Nov 15, 2011 6:14PM

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, 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

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:

Nov 16, 2011 4:46AM

"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.

Nov 16, 2011 10:04AM
Riamus:  I'd like to clarify one statement you made.  Yes, big banks have more ATM machines than my credit union.  Bank of America claims to have 15,000 ATMs.  However, my credit union belongs to a co-op of credit unions, whose ATMs I can use for free.  No fees on either end.  I have 24,000 ATMs available to me.  I can do any ATM banking at any one of them that I can do at my own credit union.  Simply ask your credit union if they belong to the co-op.  I'd be willing to bet that they do.  There are NO advantages to banking with a big bank anymore.
Nov 16, 2011 9:31AM
MSN writers should know when to use write instead of right.
Nov 16, 2011 12:05AM



Just wanted to point out the misuse of the word right under the What can you do? section.


"...not just the checks you right,.."



Nov 16, 2011 8:45AM

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.

Nov 16, 2011 7:15AM

the checks you right?


Your english could be gooder.Smile

Nov 16, 2011 11:30AM

*checks you write.  Come on editors! 

Nov 16, 2011 9:44AM

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.

Nov 16, 2011 11:22AM
I have been with Bank of America for many decades,  but ONE more thing,  and that's it.  Hello,  credit union.
Nov 16, 2011 12:26PM
With financial institutions, we keep getting less and less for higher and higher fees.  The only reason is to pay hihger and higher salaries for the top people.  What we need is someone to come along and kick them off the steps of the Wall Street Temple.   
Nov 16, 2011 11:43AM
Excuse me, but I would like to see the analysis that it costs $200 to $300 per customer per year to maintain simple checking and savings accounts.  Sounds like funny math to me.
Nov 16, 2011 10:28AM

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.

Nov 16, 2011 11:27AM
@John Doe:

"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 you with your $775? I know I do not.

Nov 16, 2011 8:19AM
there still are some banks, that do not charge fees for a free checking account, but you probably need to switch to a smaller bank..Fairfield National Bank of central Ohio, does not charge fees for free checking...and we take pride in our customer service...
Nov 16, 2011 8:37AM
@Riamus - what's that about glass houses and stones?  "Something to blantantly obvious", try spell checking your own rude comments.
Nov 16, 2011 2:41PM

@ 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!

Nov 21, 2011 1:41AM
Sigh...that's why they call them businesses, not charities.  While I'm all for encouraging reasonable, common-sense practices, some just seem to want convenient services for free...
Nov 16, 2011 8:06PM
There was an article in the NYT yesterday that did a good job of outlining the types of fees banks can use instead of blatantly charging debit card fees.  As I've been arguing all along, whether we like it or not (I don't like being charged for using my checking card or account), the issuers will find ways to make up for their lost debit card interchange revenues.

The Durbin Amendment that mandated the Federal Reserve to place a cap on these fees was a huge boon for big-box retailers.  When it's all said and done, the banks will not be worse off than before the reform took place and consumers will end up footing the bill.
Nov 16, 2011 8:29AM
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.
Nov 16, 2011 9:30AM
Conveniences, to get it you end up paying for it.

Many new 'perks' that are deemed necessary cost money, but are they necessary.
If you deposit your checks via the mail you only have to pay for a stamp, .44, instead of your cell phone .50.
If you keep a minimum balance (you need to find out what it is) many places don't charge of checking.
If you pay your bills on time there is no need for 'rush delivery'.
A $2 ATM fee doesn't hurt as much when you with draw $300 as appose to $20.

There are many ways to get around most fees, but one actually has to do something.  The bigger banks offer these conveniences if you want them, but you have to pay to use them.  Just be aware of that.  You already know 7-11 costs more than a grocery store but it's so easy to get in and out of, but do you think of the added cost of food when you leave your shopping cart in the parking lot instead of taking it back to the store itself.  Somebody is paid to retrieve it, and their salary fits into the bottom line of the store which translates eventually to the cost of the food you buy.

A lot is about conveniences if you want it you end up paying for it.
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