Bank of America Corp. and other banks are preparing new fees on basic banking services as they try to replace revenue lost to regulatory rules, in a push that is expected to spell an end to free checking accounts for many Americans.
Free checking accounts, which have been widely available for more than a decade, have been a boon to middle-class consumers and attracted low-income customers to the banking system for the first time.
Customers will likely be required to pay new monthly maintenance fees on the most basic accounts that don’t generate a lot of activity. To avoid a fee, customers will have to maintain certain account balances or frequently use other banking services, such as credit and debit cards, automated teller machines and online accounts.
“If you put $1,000 in a checking account and don’t do anything with it, it will be hard to get that for free,” says Sherief Meleis, a managing director at Novantas LLC, a consulting firm that advises banks.
We’re supposed to be shocked and surprised? I stopped frequenting banks decades ago – I do most of my financial business through a credit union. Sadly they are beginning to look and act more and more like banks.
Here’s another delight that will cross the Atlantic in due course from Europe: 2018 is that date that has been set on this right hand side of the Pond to dispense with checks altogether as the cost of processing them is too great. As 70% of all charitable gifts in Britain are by check, this is going to mean a huge degree of re-education, although younger generations (who generally are poor givers) seldom touch a checkbook at all, as far as I can see.
Buy stock in and put your accounts in smaller, well capitalized, hometown banks. Why would anyone go to B of A when you can have a personal relationship with a banker in your home town? To get personal attention at B of A, Wachovia, Wells Fargo, etc., you have to be a trillionaire. At the two banks I use in my home, I get treated like a valued customer, and the tellers and managers know my name and the names of all my family members. They know, and care about where I am travelling and how my children are doing. I have free personal checking and on my (free) business account, they pay me interest, no matter what the balance is. Hugh McColl is a very nice man, but I doubt you can call him at home and ask a question. You can do that here.
I think that I am going to move more and more back toward just using cash. Everything from ATM fees to paying more for credit at the gas pump is pushing me in this direction. The cards and checks are just a convenience. My wife and I are generally armed (legally licensed to carry) and I fear the low probability of being robbed by a street thug less than I fear the certainty of having my hard earned money constantly stolen by all these “convenience” fees.
I took a small but significant step in that direction this year with the circus. The Greatest Show on Earth makes an annual appearance in my proximity and for the past 7 years our family has made it a tradition to go. We all have a grand time and eagerly look forward to it each year. This year, I had had enough with Ticket Master and told the children that we would buy the tickets at the box office on the day of the show (they won’t sell them in advance). I got tired of paying the outrageous prices that Ticket Master charges per ticket (about a 30% markup per ticket) and wasn’t going to be at their mercy any more. I did a little digging and found out that we actually could buy the tickets directly without using them (a fact well hidden and obscure). We had a backup plan to visit another popular venue if the tickets were not available. It turned out that we were able to buy the tickets inexpensively right there at the box office on the day of the show without any fuss at all. There were only 2 people in line in front of us and only 1 person behind us. It was easy and we saved about 30%.
I have noticed this same sort of swindle at the gas pumps recently. There is about a 15 cent per gallon charge in my town for using credit cards to pay, or about 5% give or take. Saving 5% on my gasoline costs over the course of a year is a HUGE savings. Conversely…to pay that extra 5% is a huge theft of my purchasing power just for a “convenience” that I didn’t know I was paying through the nose for. My family will save about $300 a year for just paying with cash…that’s a car payment that was being taken from my family ever year because we didn’t know they were charging outrageous fees for the electronic transfer of funds from our bank to the vendor. This is all on top of any interest we may end up paying on the balance of our credit cards (if any – we try to pay them off as quick as possible).
ATM fees are another outrage. Being charged $2 to access your own money is ridiculous…especially when it is an automated transaction. Say one is just wanting $20 cash…that $2 fee is a whopping 10% of your purchasing power being taken for the “convenience” of the bank not having to pay a teller.
I am tired of it. I have been talking it over with my most beloved wife and I think we are just going to make the switch back to cash for as much as possible. The only exception I can see is Internet purchases (which you save paying sales tax on) and major purchases for things like appliances, because there is the added “insurance” of being able to do a dispute of claim if there is an issue with the merchandise.
Cash is King!
Hear hear, David — my local hometown bank thinks I’m fantastic!
; > )
And they give treats to my dog at the drive through window. And they will transfer funds by *phone*. And they give me completely free checking. And they will *cover* all ATM charges at *any* machine *anywhere* in the country. No matter where I travel I can get cash without an ATM fee.
On a broader note . . . note what these regulations which add more costs which corporations must somehow compesnate for do to the poor. Cause *their* charges to go up. People who are able to keep large sums in their checking accounts won’t have a problem. People who don’t — will have to pay to open a checking account, thanks to the regulations that added more costs.
That’s something that the collectivists simply never consider — the fact that the cost of their regulations *will come out somewhere*.
#4–As Sarah and I have said, we pay none of those fees. I recently needed cash in St. Petersburg and B of A charged $2.75 for the transaction. It never even appeared on my bank statement. They wrote it off immediately. Use a small, local bank or a Credit Union. Also, for gas, join Costco. It is ALWAYS less than anywhere in town and they don’t jack up the prices when oil goes up, like the gas stations do. They only take AmEx or a debit, but there are no fees. You can get a no fee Costco AmEx and get 1 to 5% rebates on everything you buy even if you pay off the balance every month.