This lady is ticked off by bank fees. Credit: Betsssssy/Flickr
Whatever happened to credit and debit card fees? You might remember I wrote about debit cards being cash cows for banks, which was followed by a post on major banks eliminating fees. Banks exist to profit, so many are raising existing fees to make up for ones that have been disallowed. Here is a list from Billshrink with examples. The good news is that these fees are much more transparent and upfront.
- Credit card interest rates are rising. Over the past six months, nearly 20% of card issuers have raised interest rates over 25%.
- Annual fees are up. Bank of America has added annual card fees that can range from $29 to $99 for a limited group of cardholders based on risk and profitability. Similarly, in April 2010, Citigroup added a $60 annual fee to some credit card accounts when the cardholder has annual purchases under $2400.
- Balance transfer rates have increased by 10% across the board since February.
- Foreign transaction fees are also on the rise. Fees applied to purchases made outside the US (including online shopping transactions) now average 2-3%, up from 1%.
- ATM fees now average $3.50 per transaction. ATM fees rose 13% this last year, and banks are generated more than a $10 billion a year in revenue from people who use their ATM cards in other bank’s ATM machines.
- The end of free checking? Bank of America and Wells Fargo are two banks that have started to charge a monthly maintenance fee on checking accounts. By January 2011, it is predicted that fees on checking accounts will be the norm.
My take: it’s a good time to call your credit card company and check how each of these fees have changed for your card. Make sure to ask if any increases are coming in the next 12 months. Increase the amount of your ATM withdrawals so you will not be tempted to get cash from a non-bank ATM. Or consider joining a non-traditional bank that reimburses you for all ATM fees.
Welcome to Bargain Babe! I’m Mara, and I’m so glad you’re here. I am an obsessive bargain hunter and penny pincher, and I am determined to live a full life without EVER paying full price.
I swear…they want to push everyone into bankruptcy. HOW does that help the economy? Selfish bastards. Our economy needs a reboot: One where businesses have to show MEANINGFUL CONTRIBUTION TO SOCIETY rather than a focus on showing profit to shareholders, because the old way doesn’t work. How much more evidence do we need?
I hope it’s not the end of free checking. That’s the perk of being a student; no need to have annual fees, even without a certain minimum balance. I wish financial institutions wouldn’t try to put so many people in such a predicament.
Lucky for us, banks don’t have a monoploy. When my bank adds a fee, I just switch to another.
End of free checking is nasty. I hope credit unions continue to waive maintenance fees for direct deposit account holders.
I doubt free checking will disappear completely because it is a powerful competitive tool. But it may be harder to find and have more requirements (like a minimum balance). As long as we shop around, we will be able to find the best bank for our needs.