Banks have introduced new fees as a response to new consumer protections and financial regulations of 2009.
Like the airlines, the banks have embraced a new way of doing business…nickel and dime the consumer for as many basic services as possible and extract fees for services that were once a simple matter of good customer service.
1. Monthly Maintenance Fees
Over the past decade, consumers have become accustomed to free checking accounts. Many banks have ended their free checking account programs because they are now unprofitable. The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 ended the banks’ ability to charge unreasonable fees and rate hikes.
Consumers are often unaware of their bank’s monthly service fees until they are charged for a service. The monthly maintenance fee can be charged to the customer’s savings account as well as the checking account.
In April 2011, a report from the Pew Charitable Trusts found the average length of checking account disclosures is 111 pages in addition to there being a lack of transparency when it comes to fee information. A consumer are not likely to read 111 pages worth of disclosures, polices and fees.
Monthly service fees can range from $6 up to $25 and what is worse, Ed Mierzwinski, consumer program director at U.S PIRG found that “…only a slim majority of banks provided correct fee information. “In total, 23 percent did not ever give us the fee schedule. The other 20 percent gave us wrong information.
2. New Debit Card Fees
According to the Wall Street Journal, many banks are considering charging annual fees for debit card use. The annual fee tossed around may range from $25 to $30. Banks are considering placing a monthly limit on debit card transactions and capping the maximum transaction size to $50 to $100.
If these proposals occur, the only way to avoid the fees is to use a credit card for purchases and pay the balance in full each month. Consumers with less than perfect credit may run into a road block if this is the case. Consider getting a credit card for less than perfect credit as long as the rates and terms are competitive.
Another way to avoid debit card limitations would be with a prepaid debit card such as the Green Dot® Gold Prepaid Visa Card there is no credit check, free online activation, no monthly fee for any month with at least 30 purchases, no overdraft or penalty fees and no minimum balance required.
3. Check Images with Monthly Statements
Many banks are charging customers if they elect to receive check images along with monthly statements. Bank of America is charging $3 per month for including one or more check images with your statement. Wells Fargo charges $2.00 to include check images with your statement.
4. Fee for Teller Services
Bank of America offers a free “eBanking” checking account if all of your banking transactions and services are done through the ATM or online. There is no monthly service charge when you choose online paperless statements and make your deposits and withdrawals online or by ATM, without a teller. The eBanking account gives you access to traditional bank teller services but you incur a fee of $8.95.
5. Higher ATM Fees
Banks are increasing their ATM fees for out-of-network users. Consumers using an ATM other than their bank will likely cost more money. Banks that once offered to reimburse these fees, have ended their reimbursement programs.
Many of the new fee charges are taking consumers by surprise and can be very frustrating. In the past, free checking was a way to increase deposits at a bank which would then loan out the money. The costs related to free checking were recouped from the small percentage of customers who regularly incur overdraft fees.
Since the Card Act of 2009 limits overdraft fees and protects consumers who routinely overdraw their accounts, the fees have now been transferred to consumers who handle their accounts responsibly. Banks have discovered good customers can make up for the billions lost due to consumer regulation and protection.