If you feel your bank is constantly ripping you off, you are not alone.
In fact, a recent study found that as many as a third of all those with
a checking account at a big national bank feel they have been scammed
by bank fees. As those fees continue to rise, these feelings are bound
to increase. Banks like Bank of America and Chase Bank are the worst offenders,
while consumers who bank with local banks or credit unions feel the least
cheated. According to the study, consumers hate monthly service fees the
very most. After all, the bank is charging you a monthly fee to let your
money sit in their vault.
While these fees have been around for a long time, they seem be steadily
rising. In the last quarter of 2014, the average monthly maintenance fee
for checking accounts was $12.87. This amount was up 18 cents from the
previous six months. If you want to avoid paying these monthly service
fees, you will have to consistently keep nearly $6,000 in your checking
account. In other words, in what seems to be a completely backward move,
those with the least amount of money are charged the highest service and
Americans Still Feeling the Crunch of the Recession
The dissatisfaction consumers voice about the service fees could well be
just the tip of the iceberg. Since the 2008 financial collapse, a high
percentage of adults have a lingering distrust of financial institutions
in general. Nearly three-fourths of all American adults don't feel
Wall Street properly made amends for its role in the collapse. This distrust
could be tied to the fact that most working Americans are still feeling
the bite of the recession, despite the happy spin the government has presented.
While the job market and the stock market may have improved, many Americans
are still having trouble making their paycheck stretch to the end of the month.
U.S. Bank and Bank of America Forced to Repay Some Illegal Banking Fees
U.S. Bank will have to pay $57 million in consumer relief and penalties
for unfairly charging nearly half a million customers for credit monitoring
and identity protection services they did not receive. These charges caused
many consumers to exceed their credit limit-which triggered additional
charges. Unfortunately, consumers see little of these types of settlements.
A few years back Bank of America was forced to pay out a settlement of
$410 million to consumers for insufficient funds charges; the bank would
re-order debits and credits in order to collect the most NSF fees possible.
Most consumers received a check from Bank of America for less than $50-far,
far less than most Bank of America customers paid over the years in NSF fees.
Banks Making Billions on Banking Fees
Less than one-third of all bank accounts have no fees at all, and most
of those accounts belong to the well-off. The median overdraft fee is
as high as $35 per transaction. This means if you make a $20 withdrawal
at an ATM (for which you may pay a fee from $2-$5) and that $20 overdraws
your account, you will pay 17,000% APR on that $20. Banks made $31.8 billion
in overdraft fees alone in 2013. Overdraft fees are only the tip of the
iceberg-it is likely your checking account comes with even more sneaky fees.
Bank of America now charges a $4.95 monthly fee so account holders won't
have to pay overdraft charges-if you attempt to spend more than the balance
in your account, your transaction is declined. Banks may also charge a
fee for customers who have too many deposits during any given month, an
early account closure fee, a fee if your bank statement is returned (if
you move and forget to notify the bank or fill out a change of address
card), and a minimum balance fee. Perhaps the only way to avoid these
fees is to avoid the big name banks altogether. Local banks and credit
unions as well as the newer online banks typically charge far fewer fees.