Consumers Face New Bank Fees
Remember those $35 checking account overdraft fees that were almost universally hated? Banks are in the business of making money. In previous years, they scored big profits on high overdraft fees. When the credit card reform act passed in 2009, however, new regulations meant that banks will no longer be making big bucks from fees and penalties. But consumers won't be seeing a end to fees -- as some fees went away, others popped up.
Some of the new fees mentioned in a new CNN article are:
- American Express added a $29 "reward points reinstatement" fee for customers who paid late on Delta, JetBlue, Hilton, and Starwood cobranded cards.
- Bank of America instituted $8.99 monthly fee on half of its checking accounts and added $29 to $99 in fees to a variety of BofA credit cards.
- Citibank increased its monthly checking account maintenance fees from as low as $3 to up to $30. The specific amount depends on individual accounts, such as if there is direct deposit or a minimum balance.
- HSBC charges a $19 annual fee to open a line of credit and a $10 fee for each day the customer uses the credit line.
Revanche of A Gai Shan Life says that she is trying her best to stick with free checking accounts. She keeps her money with ING and Chase, and keeps an eye out for any type of fee increases in her credit cards or checking accounts. "I will boycott the bank if they increase my fees," Revanche vowed.
I had to close one of my checking accounts after I realized that they were charging me $8.95 per month for my previously free student account that I opened in high school. I understood -- with only $300 sitting in the account and no other assets with the bank, I wasn't a profitable customer. Still, it was hard to stomach paying a fee for something that was once free.
Kim of Kim's Kitchen Sink has a savings account that charges a small monthly fee, but she maintains a high-enough balance to avoid it. The growing presence of new fees can be frustrating to customers. If you are a good customer, however, banks should work to keep you. Curtis Arnold, the founder of CreditRatings, says that you should call and negotiate with the banks if you see a fee that you don't like. (Has anyone ever seen a fee that they DO like?)
The best way to avoid fees is look for online banks (because of lower overhead they tend to offer free checking accounts and higher interest rates on saving accounts), but then you give up some of the convenience of a national bank. Or, you can set up direct deposits or automatic transfers, or maintain a certain minimum balance. Many banks will waive their checking fees for customers who do so. And last, but not least, you have to be willing take your business elsewhere if a bank or a card isn't living up to your standards.
That's what I did with my checking account, and I couldn't be happier.