News (Stay Informed)
Banks begin to charge fees on debit cards.
Banks are also are looking at new ways to make money on cash machines and especially debit cards as regulators pinch the cards’ conventional revenue streams.
To counter that lost revenue, banks are thinking about imposing annual fees of $25 or $30 on debit cards, according to people familiar with bank strategies. Some also considering limiting the number of debit-card transactions that a customer can make each month, these people said. Another idea circulating in the industry: Limiting the size of a purchase that a customer could make with a debit card. At the same time, reward programs for debit cards are likely to get the ax, these people say.
Debit cards are just one of several banking products that will carry additional fees this year. People familiar with their thinking say several banks are considering raising fees on automated-teller machines for noncustomers, which currently average $1.63 a transaction. Banks have long griped about such transactions, saying that providing cash to noncustomers isn’t a priority for them.
Bank of America Corp., which already has started adding fees to its basic services such as checking accounts. The fees are expected to be structured based on the level of account activity and the number of financial products that a customer uses. The Charlotte, N.C. lender took a first step in this direction last year when it unveiled a new account that charges $8.95 a month if customers don’t use the ATMs or the Web while banking.
The banks defend the higher fees by saying that customers can avoid many of them by maintaining monthly balances and keeping the account active.
Chase, the retail arm of J.P. Morgan, now requires customers to make at least one direct deposit of at least $500 to waive a monthly fee. Previously, customers could make multiple direct deposits that added up to $500 in order to get the fee waived. The bank also offers other ways to avoid a monthly fee, including keeping a minimum daily balance of $1,500.
This is what happens when banks form an oligarchy. Customers need to know their rights. Most of the banks listed in the article have already enacted new fees. BoA’s myaccess student checking is no longer being offered but if you have it don’t worry, your account is grandfathered in. Do call BOA and update your status as a student though since they are waiting to change your account.
Chase customers now have to pay $5 for a money order or $8 for a cashiers check. Chase also increased their direct deposit amount to $500 for the fee to be waived and this direct deposit amount cannot be combined as it used to be.
Bank of America now charges 100$ a year to maintain a self-directed brokerage account where it once was free. Bof A is now charging $3 per month for the privilege of receiving small facsimiles of checks on monthly statements.
If you are looking for access to a free checking account, check out Bank of America’s eBanking account which waives all fees if you maintain an online monthly checking account and access ATM’s instead of doing business at a teller. If online banking is not your preference, try joining Region’s or smaller banks or even a credit union (which exists for members and not shareholders).
I see small banks making a comeback in the future as people get sick of all these fees.