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Dealing with bank fees

Created date

November 22nd, 2011

Look out for letters from your bank alerting you to new fees or changes to charges you currently pay. If you bank at a large national institution, you may recently have received a notice telling you that your free checking account would now come with a $15 monthly fee unless you maintained a certain balance or that you d be charged $5 a month to use your debit card. Reportedly under pressure from federal legislation that reduces banks revenue, Bank of America, Wells Fargo, and other large banks rolled out new fees earlier this year. Those fees drew ire from consumers, and many banks quickly rescinded proposed charges, according to John Ulzheimer, president of consumer education at SmartCredit.com. If the past few weeks have taught us anything, it s that consumers have no appetite whatsoever to be charged for access to their own money, Ulzheimer says. Ulzheimer says to watch for announcements of fees to receive paper statements or increased foreign transaction charges, which he says are less likely to make headlines and anger consumers.

Watch for hidden costs

Marsha Baker, who teaches consumer finance at Lindenwood University in St. Charles, Mo., says banks may start charging customers to speak to live customer service representatives or adding fees for transactions that require you to enter your pin number. Baker also warns that some banks may try to generate revenue by upselling certain services. For example, if you put a stop payment on a check, a teller may suggest you pay an additional charge to extend that order beyond six months. She says fees like that prey on uninformed consumers because most banks would not honor checks older than six months, making the extended coverage unnecessary. The banks aren t going to make it easy, she says. Yes, they have to disclose fee changes, but they might not put it on the front page.

Weigh your options

According to recent news reports, many consumers are sidestepping bank fees by transferring money to credit unions. Amber Danford, vice president of marketing for Texas Trust Credit Union (texastrustcu.org), says credit unions are nonprofits and therefore not subject to the same legislation that is prompting banks to implement new fees. Danford says credit unions are typically smaller and have cultures highly focused on customer service. But she reminds people that credit unions aren t just for checking and savings accounts. Many offer the same services as large banks, including mortgage and auto loans, insurance, credit cards, and financial advisers. If you re interested in finding credit unions in your area for which you may be eligible for membership, Danford says to visit joinacreditunion.org or asmarterchoice.org. If you re comfortable with technology and don t need to interact with a live banker, online banks can be a convenient option. A lot of these [online] checking accounts allow you to deposit checks by taking pictures on your smartphone, says Tim Chen, CEO of NerdWallet (nerdwallet.com). He recommends USAA Bank for veterans. ING Direct is another popular online bank that promises low fees. meghan.streit@erickson.com

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