With the passage of the CARD Act of 2009, banks are expected to lose $20 billion of dollars nationwide, according to the Nilson Report. With revenue losses so extreme, the banks and credit card issuers are beginning to implement new ways to charge to consumer to build up revenue.
Banks across the nation have begun charging maintenance fees, enforcing debit card balances, and increasing ATM withdrawal fees. Dealing with these fees is no joke for your bank account and for your finances. While there is no way to skirt around these charges, the more aware you are, the better you will be able to handle yourself.
Watch Out For:
Monthly Debit Fees: Wells Fargo will begin charging a pilot $3 monthly fee for personal and business debit cards. Starting Oct. 14, Wells Fargo customers in Georgia, Washington, New Mexico, Nevada and Oregon will be charged $3 a month regardless if they use their card or not. The $3 is a user fee that is not associated with any ATM withdrawal or inactivity. Consumers can avoid the fee by not using their card, and the fees will only affect consumers who have opened up accounts in those five states.
ATM Withdrawal Fees: Some banks such have Chase have begun charging $5 ATM withdrawal fees, if you are not a customer of their bank. These ATM withdrawal fees are tacked right on to the fees that your bank charges you for using an outside ATM. According to Moebs Services, an industry banking research firm, the average fee for consumers who are using an outside bank is $2.60. Many banks have rolled out these ATM withdrawal fees across the nation. Check and see the status of your bank.
Early Withdrawal Fees: For early withdrawals of CDs, Bank of America used to charge a percentage equal to 90 days worth of interest for a 12 month account. For example, a 12 month CD valued at $20,000, with an annual return of .3% would have a withdrawal penalty equal to about $14 if you took out the full amount. Bank of America is now charging a flat rate of $25, in addition to 1% of the CD for a 12-month account. For longer CD accounts, a 3% fee may be charged. So for that same 12-month, $20,000 CD, instead of a $7 early withdrawal fee, the fee would be $250, which is approximately 1,700% more money.
Minimum Balances: There are a variety of minimum balances that a bank can charge a consumer. Before you sign up for your account, check to see if your checking account has a concrete minimum balance, a minimum daily balance, a minimum combined balance, or an average monthly balance. Depending on which one is specific to your account, determines how much the monthly fee will be. But more or less, if you fail to keep your account above the minimum balance you will be charged every month that the account is open. When signing up for the card, make sure that you can afford to have double what the minimum balance is in your account at all times. If not, try a new card.
After the Credit Card Act of 2009, banks will come up with the most creative schemes to get money out of the consumer. It’s up to you to be a smart and savvy consumer and be wary of the fees that could be coming your way.