How Much Are You Paying Your Bank?
Let me begin by telling you a story. Linda Joy wanted to go shopping so she planned her list carefully, which included a trip to the bank. She had a new debit card and needed to activate it for use in the store that day. Linda stopped at the nearest ATM outside of her bank’s network, because one store was close by and about to close. After wrongfully entering her PIN several times she finally remembered it. She proceeded to get some cash with a $3 out-of-network ATM fee. Linda then went shopping and caught some great unexpected sales, but was happy she had her new debit card to use. It was a great day. At the end of the month Linda’s bank statement came as expected, but she didn’t expect to see several additional fees from her day of shopping:
$5 Use of Debit Card for the month
$3 Additional Out of Network ATM Fee
$1.50 Multiple Entries of PIN at the ATM and
$6 Increase of Checking Account Fee
Linda discovered the hard way that her big of day shopping had turned into a fees payday for her bank. What Linda experienced is what consumers must be on the alert for. Since before October 1, 2011, when the Dodd-Frank Act took effect to curb excessive banking fees, many larger banks have been quietly unbundling there included services to charge new fees to their customers all in the name of raising profit.
Most recently rescinded were the Monthly Debit Card Usage fees that were to take effect at the beginning of the year. Bank of America, Chase, US Bank and Wells Fargo, to name a few, were set to require the $3 to $5 fee just for using your debit card to pay for purchases. After a major uproar by not only Consumers, but Lawmakers the fee was scrapped…for now at least. One of the most notorious, Bank of America, CEO Brian Moynihan initially defended it, saying that his company "has a right to make a profit."
This brings to the forefront the need to know what fees your bank charges for their services. Unfortunately, these fees are not always posted upfront and many are only discovered after they have been incurred by the customer. The U.S. Public Interest Research Group published a report Big Banks, Bigger Fees, earlier this year to provide insight into these fees. You can read it on their website at www.PublicInterestNetwork.org it suggests that there are upwards of around 49 fees at time of the report printing.
Bank customers should ask for a full listing of your banks fees, if even available. If you find that there are too many you may want to do what 650,000 other customers did when the Debit Card Usage fee was announced and join your local credit union. Credit unions are a staple in the financial industries and often times avoid the fees for services that traditional banks charge, because they are member owned. To find a credit union in your area search online at www.CreditUnionsOnline.com the service is free.
© 2011 Ask Yvon is a written by S. Yvon Harper for Focus on Finance, LLC – (513)341-5912. All rights reserved. Contact for questions at FocusOnFinanceOnline.com/Contact. Join us on Facebook at www.Facebook.com/FocusOnFinance. Readers are strongly urged to consult with a qualified legal or tax advisor to analyze your specific financial situation before application of any advice from this column.