Consumers must be vigilant about checking account fees

The banks first took away the free checking and now they are charging more on withdrawals from ATM’s as well as ‘stop payments’ on checks and such services.  The banks are most notably gearing up for a cap on fees that can be collected from merchants whenever the consumers use their debit cards for purchases.  This proposed restriction, some believe, could slash the income by at least 70% which is about $14 billion a year.  Enrolling customers automatically into an overdraft facility will bring about a huge resource pool by way of the penalty fee income, but the banks are prohibited from doing so.  To counter this, the banks are trying to introduce new fees and are slowly raising the existing fees.  There are five ways one can dodge the fees on checking accounts.  They are:

  1. Choose the right account – for instance, at the Citi, customers who had previously maintained a minimum balance of $1,500 enjoyed the benefits of free checking.  Whereas, now customers will have to make a minimum of five transactions per month on their checking accounts to get a waiver of around $8 from the monthly fee. 
  2. Look out for service fees – in case there is a check bounce, earlier on it would have caused some inconvenience nevertheless, but carried no penalty fee.  But now Bank of America has started charging $12 for every check that is bounced.  Now the statements which include the check images do not come free either and cost around $3.
    A stop payment at Chase will cost $34 starting Feb 5th, which is up from $32.  Now the domestic wire transfers too will cost $30 while it was $25 earlier on. 
  3. Be cautious while using ATM’s – they can literally rob you off a few dollars as Bank of America charges $3 to print a summary of the account at the ATM ($2 earlier).  Chase will charge $1 from next month to print the recent transactions.  Using ATM’s of other banks will get costlier.
  4. Don’t use overdrafts – earlier this was not an option as banks would automatically enroll their clients for overdraft and extract penalty fees.  Now the choice will remain with the customers. 
  5. Switch to other checking accounts – if you are not satisfied with your checking account then make the switch without delay.  Credit unions and community banks are other options.  Keeping higher balances will attract less service fees sometimes.

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