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Consumers Feeling Pinch as Bank Fees Increase
August 14, 2012
From a Forbes article:
Feel that pinch? That’s your bank charging you a little more this year for checking and ATM fees. A new survey of 50 of the nation’s largest banks finds that basic banking costs jumped in just about every category in 2012.
That includes the minimum amount required to open an account which jumped to $408.76 on average up from $391.41., according to Moneyrate.com.
“The higher this minimum becomes, the more poorer customers may be forced to go un-banked,” the survey notes.
Monthly service fees also increased to $12.08 from $11.28 last year. Broken down by bank size larger banks with more than $25 billion in deposits charge more with the average monthly maintenance fee $13.88 while it was only $9.87 at small banks (those with less than $5 billion in deposits).
One way customers avoid those monthly fees is by promising the bank to keep a specified minimum balance in the account. Unfortunately the average minimum amount increased to $4,446.57 from $3,590.83–a 24% increase.
Overdraft fees increased incrementally to an average of $29.83, up from $29.23.
“Previous surveys have tended to show more of a mixed bag, with some fees rising and others falling. But the latest survey shows a comprehensive trend toward checking accounts becoming more expensive,” the survey notes.
The latest data from Moneyrate doesn’t bode well for banks who are struggling to keep a customers happy. Last year Bank of America announced it would start charging customers a $5 monthly debit card usage fee and it faced heavy criticism. It eventually back-tracked though.
But the survey shows that banks haven’t stopped looking for other ways to charge customers additional fees. What’s with the nickel and diming by banks?
As financial institutions, particularly large banks, continue to increase fees in various areas, consumers are increasingly looking at alternatives to fees or increased minimum deposits. Options often include reviewing non-traditional business models in other financial institutions.
Recent Mercator Advisory Group research, including “Trends in Branch Deployment” and “Surcharge-Fee ATMs and Shared Banking Networks,” shows consumers' strong interest in alternative and, or creative banking business models, particularly those without numerous and annoying user fees.
to read more from Forbes.
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