Bank of America ranked first among U.S. commercial banks on the most recent Fortune 500 list. (Photo Credit: CC BY/MoneyBlogNewz/Flickr)

Phrases like “bank bailout” and “too big to fail” have left a sour taste in the mouths of consumers. The results are easy to see in recent consumer confidence polls, suggests Bankrate. The question “Do you trust your bank?” posed by banking consultants BAI & Finacle in their biannual Index of Bank Sentiment survey received negative replies from consumers. Not only that, but the survey shows that bankers’ assessment of consumer confidence is entirely out of whack.

The divide between consumer and banker opinion

The Index of Bank Sentiment survey polled a large group of bankers and more than 2,500 U.S. banking customers. According to the results, the gap between consumers who trust their bank (77 points on the survey scale) and bankers who believe consumers trust them (121 points) suggest a cavernous divide, rather than a mere difference of opinion. A mark of 100 points for either side would have indicated reasonable confidence.

Some financial experts believe that the rise of non-traditional consumer credit products like payday loans supports the findings of the BAI & Finacle survey. If the answer to the question “Do you trust your bank?” is no, it is not surprising that a consumer would look to other financial institutions for small loans.

Trust versus perception

Curiously, while the Index of Bank Sentiment survey indicates that most consumers didn’t trust their banks (63 percent), 64 percent of consumer respondents still indicated that their primary bank has a “good image and reputation.” Forty percent felt their bank wasn’t looking out for their best interests.

In terms of bank fees, a whopping 85 percent of consumers voiced their expectation that they should not have to pay for a checking account. Only 44 percent found current bank fees to be reasonable.

Commercial banks on the Fortune 500 list

While community banks and credit unions have become increasingly popular with consumers, large commercial banks still reign supreme when it comes to capturing consumer business. According to the recently released Fortune 500 list, 20 commercial banks cracked the list of top U.S. companies, with seven in the top 100. Bank of America Corp. ranked first among commercial banks, and ninth overall on the Fortune 500. JPMorgan Chase & Co. (13 overall), Citigroup (14), Wells Fargo (23) and Goldman Sachs Group (54) rounded out the top five.

US consumer opinion of other financial service companies

A world of financial service companies does exist beyond banks, from investment brokers to payday loan companies. Expanding upon the BAI & Finacle survey, The Edelman Trust in U.S. Financial Services Survey found that almost half of consumers polled trusted their financial service company less in 2010 than the previous year. Forty-six percent of respondents attributed the erosion of trust to corporate greed, while 20 percent felt that the financial services industry exacerbated the country’s financial meltdown.

Sources

Bankrate.com

Shared Financial Success

Author Ramit Sethi on ways banks nickel and dime you

Consumers are putting out even more cash to access their own money. Image: Flickr / MoneyBlogNewz / CC-BY

The price for bank customers to access their own money appears to be going up. The federal Truth in Savings Act requires that banks disclose all fees involved with bank accounts. Two recent reports highlight the high cost of everyday financial transactions, all while the Consumer Financial Protection Bureau waits for a director.

The high cost of accessing your own money

The Pew Health Group, a subdivision of the Pew Charitable Trusts, has released a new report on the average checking account in the U.S. According to this study, the average bank checking account has four often-used fees:

• An opt-in overdraft fee of $35
• Overdraft transfer fee of $10 per occurrence
• Extended overdraft penalty of $25 per week
• A monthly fee of $8.95

Financial research service Moebs estimates that in 2011, banks will make $38 billion from overdraft revenue, 90 percent from “frequent fliers” in the overdraft system.

Lack of transparency in bank accounts

The Credit CARD Act of 2009 was written to help protect consumers from deceptive and non-transparent fee structures. The Truth in Savings Act, passed in 1991, was intended to implement the same kind of reforms in the banking system. The U.S. PRIG advocacy group recently conducted a compliance review of banks and credit unions and found that less than 60 percent of banking institutions surveyed provided the fee and cost disclosures required by the Truth in Savings Act. Full compliance with the TiSA was at about 40 percent.

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau is the federal agency charged with overseeing financial products. The CFPB, however, has yet to find a director that Republicans and Democrats agree on. Currently, House Republicans have threatened to block all nominees for head of the CFBP unless the structure and funding for the agency is changed. Many of the consumer watchdog functions of the CFPB cannot be put into effect until the agency has a director.

Avoiding fees at your bank

When you are trying to decide on a bank or credit union, there are a few things to look for to protect yourself. First, check out local and regional banks and credit unions rather than “big name” banks. You should also ask about free checking options and ask for a clear, concise disclosure about overdraft fees, fines and monthly maintenance fees. You should also sign up for alerts, so you can be informed when there are changes to your bank account.

Sources

Moebs
Washington Post
Pew Trusts
US PRIG

ATM fees may not be climbing too much higher, at least for now. Image from Wikimedia Commons.

JPMorgan Chase is bringing an end to its higher ATM fee test run. Chase began a pilot program some time ago where out-of-network ATM transaction fees for non-Chase customers were raised to $4 and $5 in some areas as a test. The high fees just so happened to not be very popular with consumers.

Consumers not amused by high ATM fees

In February of this year, JPMorgan Chase announced that it was going to start testing a new fee structure for non-Chase members that used Chase ATMs. The new fees were instituted in Texas and Illinois, according to CNN. Chase maintains one of the largest ATM networks in the country, and was trying to get people to pay a little more for the convenience of using that network. So the large nationwide bank raised its fees on a trial basis to $4 in Ill., and to $5 in Texas. The Chase network comprises more than 16,000 ATMs nationwide, and there is a reasonable expectation that people should pay to use such a large network. However, people in those states were not amused.

Chase canceling program

JPMorgan Chase is canceling the higher fees. Though Chase does maintain the second largest ATM network in the nation and about 25 percent of all Chase ATMs are in those states, according to USA Today, people stopped using Chase ATMs if an ATM with lower fees or one in their network was nearby. Chase will revert to the standard $3 fee. The nationwide average fee at automatic teller machines, according to MSN, was $2.11 in January. The city that had the highest fees on average as of November was Seattle, Wash., according to the New York Times, and the city with the lowest ATM fees was Cleveland, Ohio. ATM fees have been going up, as financial reform laws have been restricting certain types of fee-assessment practices at banks.

Fewer people after loan capital

Though banks are just as willing to lend consumer loans, there are fewer people lining up to apply for them. The Federal Reserve has noted looser lending criteria for consumer loans such as credit cards, installment loans and other types of personal loans, but demand has been down for some time, according to the Wall Street Journal. If people don’t feel as secure in employment, they are less likely to want to go into debt. Interest earnings for major banking institutions has been declining for months, as fewer consumers are interested in going into more debt after the nightmare of the past few years.

Sources

CNN

USA Today

MSN

New York Times

Wall Street Journal

Despite bank customer satisfaction being higher, banks are being sued more frequently for ATM fee policies. Image from Wikimedia Commons.

Bank fees, specifically ATM fees charged to out-of-network debit card holders, infuriate many consumers. An increasing number of lawsuits have been initiated nationwide based on an obscure law regarding ATM fee disclosure.

Banks facing 30 lawsuits over bank fees in Michigan

There are more than 30 lawsuits over fees at automated teller machines facing various banks in the state of Michigan. All of the suits concern fee disclosure laws, according to USA Today. There are similar suits pending in numerous states, but there are the most in Michigan because of a couple of pesky retirees. Nancy Kinder and Ray Harrison of Fowlerville, Mich., have sued numerous banks because they found that they do not disclose bank fees in the manner specified in the Electronic Funds Transfer Act. Kinder and Harrison filed five of the suits in one day. They have, according to the Chicago Tribune, sued 36 banks in the last two years, accusing them of violations of federal law.

Nuisance lawsuits

Kinder and Harrison actively search for banks that aren’t in compliance with federal law regarding how ATM fees are advertised. When they find a violator, they make an ATM withdrawal and take pictures of the screen during the transaction along with the disclosing signage. Once the evidence is gathered, they file a lawsuit against the offending bank. Banks must have a sign disclosing the fees; a notice on the screen isn’t enough.

Customers more satisfied with their banks

A consumer survey by J.D. Power and Associates found that consumers are happier with their banking experience compared to three years ago, according to CNN. On J.D. Power’s 1,000 point scale, customer satisfaction rated a 752 for banking, four points higher than last year and the first time the approval rating has moved up since 2007. Bank fees and credit card fees have been getting a lot of attention recently for being raised at nearly every opportunity. However, only 18 percent of those in the survey had their fee structure changed in the last year, and only 43 percent recalled being charged a fee by their banks. That changed from last year, when the same survey revealed 53 percent of bank customers surveyed had been charged a fee by their bank.

Sources

USA Today

Chicago Tribune

CNN

Credit card debt protection plans are great, for credit card companies. Photo Credit: Money Blog Newz/Flickr/CC-BY

A recent report by the Government Accountability Office advises that consumers may want to think twice about entering into credit card debt protection plans. Such plans usually offer insurance against missed payments and so forth and seem like a good idea. However, it may benefit the card companies more than customers.

Debt protection plans benefit card companies

Credit card companies currently offer their customers dept protection plans, which the Government Accountability Office asserts is a beneficial arrangement, but mostly for the card companies. Essentially, if card carriers want to guard themselves against a possible default or missed payment, they can enroll in a debt protection insurance plan. The card holder pays a monthly fee, which is usually 85 cents to more than $1 per $100 of balance carried, according to Marlys Harris’ blog on CBS MoneyWatch. At $1 per $100, a $2500 balance generates about $300 in enrollment fees per year. Those debt protection fees added up to $2.4 billion in revenue for the credit card companies in 2009, according to the Wall Street Journal.

Few claims paid

From that $2.4 billion in revenue, card issuers only paid about $518 million in benefits to people who filed a claim and only about 5.3 percent of people who filed a claim and maintained a balance had their claim paid by the credit card company. That revenue was about 55 percent profit, and a further 24 percent went to administrative costs. The 21 percent of revenue that was paid out is far less than automotive and life insurance companies pay. A person could conceivably be better off using instant payday loans instead of credit cards with debt protection insurance, in that most payday loans get paid off all at once.

Bank fees hard to get clarified

A survey by the United States Public Interest Research Group, a consortium of public interest groups from all 50 states, found that less than 40 percent of 392 surveyed banks and credit unions would fully comply with the Truth in Savings Act when asked to provide a list of all the fees the bank charges consumers, according to Reuters. Upon request the institution should be able to produce a fee schedule that lists account service fees, account closure fees, ATM fees and other fees such as a stop payment fee, bounced check or check processing fee. Some complied after multiple requests, and 45 percent refused to comply at all.

Sources

CBS

Wall Street journal

Reuters

Next in the backlash from banks in the battle over interchange fees is the loss of debit card rewards, which JP Mortgan Chase is already dropping. Image from Wikimedia Commons.

The next customer perk to go on the chopping block at the nation’s largest banks is debit card rewards. JP Morgan Chase stopped offering debit card rewards to customers in February, and will stop giving rewards to debit card swiping customers entirely in July. The program was closed due to the ongoing battle over the pending cap on interchange fees.

Banks contend they will be brought low with interchange fee cap

The possible cap on interchange fees, or the fees banks charge merchants to transmit payment from debit purchases, has caused the nation’s largest banks to start curtailing customer rewards and incentives, such as free checking. The next casualty of the interchange fee battle is likely to be debit card rewards, according to Bloomberg. Leading the charge in cutting back on rewards for customers is JP Morgan Chase, which stopped offering enrollment into the debit card rewards program to new customers in February. Chase will stop offering rewards altogether on July 19, though any reward points that have been accrued by that point will still be honored. Consumers may eventually need same day loans to use their own money.

Fees at ATM locations going up as well

Another response to financial reform laws has been to raise fees for using automatic teller machines out of a bank’s network, according to MSNBC. JP Morgan Chase, the second largest bank in America, is currently testing $4 and $5 fees for customers who use Chase machines that aren’t Chase customers. The program is testing $4 fees in Texas and $5 fees in Illinois. All other states will retain the $3 fee for non-Chase customers, which is above the $2.33 national average. Chase customers will still pay only $2 per transaction at non-Chase ATMs, which is also above the $1.41 national average. Chase has the second largest ATM network in the nation. TD Bank and Citi bank are following suit, and Wells Fargo and Bank of America are likely to not be far behind. The idea of Chase, Bank of America and Wells Fargo having to run for installment loans because legislation prevents them from gouging customers is not likely to cause many people discomfort, but there is a catch.

Credit unions would also suffer

Merchants are charged interchange fees by for-profit banks and non-profit credit unions alike, according to Forbes, and that is why credit union trade groups such as the National Association of Federal Credit Unions, oppose the Durbin Amendment to the Dodd Frank Act. Credit unions and community banks are not as easily equipped to absorb the loss of revenue from interchange fees, which will be lowered to 12 cents per transaction from the current average of 44 under the current proposal by the Federal Reserve. Currently, bills are being introduced into the House of Representatives and Senate which would delay the Durbin Amendment from taking effect for two years, in order to study the possible fallout.

Sources

Bloomberg

MSNBC

Forbes

Bank of America has unveiled a pilot program that grants customers greater choice between checking account types, and associated bank fees. Photo Credit: MoneyBlogNewz/Flickr/CC-BY

Bank of America has unveiled a new pilot program that gives members of the bank more choices regarding their checking accounts. The bank is offering new customers in select areas choices between checking accounts with varying structures of bank fees. Bank of America and other large national banks have been steadily raising fees.

New pilot program lets customers choose banking fees

A new pilot program by Bank of America allows customers to choose from several different checking account plans; this allows greater choice regarding which account fees they prefer to potentially face, according to ABC. The largest national banks have come under criticism for charging excessive banking fees, and now Bank of America, JP Morgan Chase, Wells Fargo and others have rolled out new programs for checking accounts to make fees more transparent. The new B of A checking account programs are being offered in Georgia, Arizona and Massachusetts.

Monthly fees vary by account type

Bank of America is offering five checking account options, and fees range from $6 to $25 per month. The account types include:

• Essentials: Simple checking account with a debit card. The monthly account fee is $8.95, but the fee is waived if a customer receives monthly direct deposits or maintains a minimum account balance of $1,500.
• eBanking: Also simple checking. However, customers can waive most fees altogether by banking entirely online or through an ATM and electing to receive electronic statements instead of paper. However, overdraft, non-sufficient funds and ATM fees will still likely apply.

Account options with greater amenities are geared toward wealthier account holders.

• Enhanced: Account fees are waived if customer has a minimum balance of $2,000 in one account or $5,000 across linked accounts. The Enhanced account offers two linked checking and two savings or money market accounts. Enhanced account holders can also have fees waived with monthly use of linked credit cards.
• Premium: Fees are waived with a minimum balance of $20,000 across linked accounts, certain Merill Lynch investment accounts or a mortgage through Bank of America. This account offers services such as cashier’s checks and money orders for free.
• Platinum Privileges: Customers must have a minimum account balance of $50,000 in order to be eligible for these perks: Personalized customer service, a Privileges credit card, special rates on mortgages and money market accounts.

Bank fees on the rise

As the federal government has increased regulatory pressure on banks to curtail deceptive fee practices, account fees have been steadily rising at the nation’s largest banks. B of A, Chase and Wells Fargo are trying to make up for revenues lost when the Dodd-Frank Act curtailed fee practices that weren’t made clear to customers, e.g. enrolling checking account holders in costly overdraft protection programs without notifying them.

Source

ABC

The nation's largest banks may start limiting debit card usage, as legislators are targeting usurious bank fees. Image from Wikimedia Commons.

The largest banks in the nation may institute limits on how often debit cards can be used by account holders. Large banks are said to be hurting from laws which limit how much can be charged to retailers by banks when customers of those banks swipe their debit cards. Various acts of legislation have been aimed at curbing fees paid demanded by banks.

Cap on fees charged to retailers could prompt backlash

A law passed last year will cap the fees banks charge retailers when customers make purchases with debit cards. When a person pays for something with a debit card, the merchant is charged a fee by the bank that the customer belongs too, called an interchange fee. Last fall, the Durbin Amendment of the Dodd Frank Act gave the Federal Reserve powers to place limits on the fees that banks charge to retailers, according to ABC. The Fed proposed that fees be limited to 12 cents per transaction. The current rate is about 63 cents per transaction, though it isn’t likely that any of the largest banks in the nation will have to run for a cash advance to cover losses anytime soon.

Possible curb on debit purchases

It is rumored that the largest banks in the nation may begin imposing a limit on how many purchases people can make with their debit cards, or how large a purchase made with debit may be. The limit could be set as low as $50 to $100 in order to restrict customer use of debit cards, and thus not lose too much revenue. Interchange fees currently make up about $80 billion in revenue for the banking industry. Vikram Pandit, CEO of Citigroup, maintains that the fee caps will restrict available credit for banks and loan lenders, according to Bloomberg.

Trend of rising fees

The nation’s largest banks have been raising fees and cutting programs such as free checking for months, as an overall trend has been emerging of commercial banking trying to extract more revenue from customers. However, people can avoid dramatic fee increases by banking with community banks and credit unions. Just about every city in America, from Scottsdale to Birmingham, has a credit union or two open to just about anyone.

Sources

ABC

Bloomberg

People are going to have to pay advance cash to banks more often to use their checking accounts. Image from Wikimedia Commons.

People who bank with the nation’s largest banks are going to have to start paying advance cash for having a checking account. Free checking accounts are all but gone at major banks, now that U.S. Bank is rumored to be jumping on the account fee bandwagon. Increasing bank fees are a trend unlikely to cease.

Banks charging advance cash

Free checking accounts, from the customer’s standpoint, were far preferable to checking accounts with fees. It used to be an account holder simply had to pay for blank checks, they didn’t have to pay the bank advance cash to keep the account open for another month. Account holders at the nation’s largest banks can bid goodbye to those days, as free checking accounts are becoming a thing of the past. Bank of America, Wells Fargo and JP Morgan Chase all introduced new fees on checking accounts, and U.S. Bank is likely going to hop on the bandwagon, according to CNN. More people can expect to have to part with some instant cash to use their own money.

Get around fees

Avoiding bank fees is one of the more common reasons people take out a payday loan, but there are other ways around bank fees as well. Consumers should check with their banks to find out what loopholes they might be able to use to get around fees. For instance, check to see if a minimum balance can get any maintenance fees waived and whether monthly direct deposits can get fees waived. Some banks will waive account fees after a minimum number of purchases with a debit card.

Free checking will not die

Just because major banks are instituting fees does not mean free checking is going extinct. For instance, many community banks and credit unions offer free checking accounts and lower fees than major banks. Fees at those institutions go back into the community, not toward funding an executive ski chalet in Scottsdale, Arizona.

Source

CNN

Major banks are starting to demand more cash be advanced to them simply for having an account with them. Photo Credit: MoneyBlogNews/Flickr/CC-BY

Major banks are all starting to require some cash advanced by checking account holders just for the pleasure of banking with the company. Fees for checking accounts are being raised at most major banks, but there are ways of getting around them. People using their own money are having to pay more for it.

Banks want cash advanced just for banking with them

Part of the marketability of the nation’s largest banks is that they project an image of more security. Banks know this, and now they want some cash advanced to them just for the pleasure of banking with them. The largest national banks are raising fees on checking accounts, according to CNN, and the changes are starting soon. JPMorgan Chase has announced that new checking accounts will automatically be opened under the new Total Checking program, which has a base monthly maintenance fee of $12 a month. Bank of America is instituting fees on checking accounts, from $8.95 to $25 a month, depending on the plan. It appears Corporate America wants people to pay to use their own pay day cash.

Free checking not disappearing

It may seem there aren’t any banks that offer free checking anymore, but nothing could be further from the truth. The majority of credit unions and community banks offer free checking, and because credit unions are nonprofit organizations, an account holder is essentially injecting instant cash into their own community. Credit unions and community banks are in nearly every city, in every state, from Alabama to Arizona, and all points in between.

The same folks who needed bailouts

These are the same people who also received billions in the bailouts. Not only do they want more of our earnings, they want our tax dollars too. Not that these companies are all bad, but it certainly means that more people are going to be excluded.

Source

CNN

Chase wants more instant cash from customers who are audacious enough to be poor and bank with them. Image from Wikimedia Commons.

Chase banking customers will soon start to see more cash going out the door in bank fees. Major banks are raising account fees left and right, as apparently even the biggest banking organizations are hard up for money. Regulations have made covert bank fees harder to institute.

Bank fees rise for least wealthy of Chase customers

JP Morgan Chase is raising the fees on some checking accounts that receive direct deposits that will cost the least wealthy of Chase customers more instant cash for the egregious act of simply banking with one of the nations’ largest banks, according to USA Today. Chase will be assessing a $6 fee on accounts that receive direct deposits if a deposit is less than $500. Say a person gets one $495 direct deposit and a $1,000 deposit of pay day cash into a Chase account every month. That person will end up with a $6 account fee because one of the deposits is less than $1,000 and that person had the audacity to not be rich while banking with JPMorgan Chase. The fees take effect in February of 2011.

Punishment of the poor

The people who will end up getting hit with the fees and having to advance cash to Chase for having an account that receives deposits with them are the most vulnerable. Mostly, it will be retirees and the unemployed. Many people receive unemployment benefits that total less than $500 per check, and about 7 percent of people living off of Social Security benefits receive $500 or less as well. Apparently, if a multi-billion dollar corporation needs money now, the best source for it is people who really do need money now.

Even the largest banks need money

Major banks, such as Chase and Bank of America are thought of as virtuous bastions of capitalism but have begun notoriously raising bank fees in the open as regulations make it harder for them to do so covertly. For instance, a bank cannot automatically enroll a person in overdraft protection without asking them first. Overdraft fees are one of the largest sources of revenue for banking institutions.

Sources

USA Today

Consumers are getting fed up with having to give the bank a cash advance to use their own money. Image from Wikimedia Commons.

Americans are getting fed up with having to give a cash advance to banks to use their own money. In order to get a quick payday out of customers, major banks are stepping up account fees, ATM and overdraft fees. Account holders are not amused.

Anger over giving a cash advance to banks grows

Most American consumers don’t think it’s fair that a person should have to give a money to a bank to use their own payday cash, according to ABC. The Office of the Comptroller estimates that there will be 80,000 or more complaints by consumers about their financial institution by the end of the year. That would make it the highest level of dissatisfaction with banks since consumer dissatisfaction with banks began being monitored 15 years ago. New regulations were passed last year that helped, but it hasn’t stopped banks from trying to find new ways to extract instant cash from their customers.

Frustration over overdrafts

The bulk of consumers’ ire is about overdraft fees. A practice among some large banks is to clear large transactions first. This way, if multiple overdrafts occur due to a few small purchases, those fees stack up.  Say a person pays their power bill, buys a pack of gum, a coffee and a sandwich over the course of one day with their debit card, but only has enough money to cover the power bill. The bank will clear the largest purchase first. That way, the smaller purchases made when the account was in overdraft can all result in the most fees possible. This practice makes a lot of quick payday cash for banks.

Interest rate can be astounding

Overdraft fees can be viewed as sort of a loan until payday, as the customer is technically borrowing money and paying a fee for it. That said, a $35 fee on a $1 overdraft, is 3,500 percent in simple interest. That works out to 1,277,500 percent APR.

Sources

ABC

Watch out for new ATM and overdraft fees, as you may be better off getting a payday loan. Image from Wikimedia Commons.

Overdraft and account fees are the way banks get a lot of instant cash from their customers. Granted, a fee of some sort is not unreasonable in some situations. However, bank fees generate quite the pay day for the typical banking institution.

Fees rise as laws force banks to find more instant cash

Legislation passed earlier this year forces banks to adhere to new rules concerning overdraft fees and other account fees. For instance, customers now must be asked whether they want overdraft protection. Customers also have to be asked if they would prefer to get a cash advance from the bank to cover overdrafts or just opt out of a transaction. However, because practices that omitted that information are no longer legal, banks and credit unions now have to find more ways of generating income from customers. For instance, according to CNN, ATM fees have risen by 5 percent this year. Overdraft fees rose 3 percent on average, and the average overdraft fee is now $30.47 per occurrence. That’s actually about the same cost as a small payday loan.

Interest in excess of what is excessive

The interest rates on overdraft fees are insane. For instance, let’s assume a person spends $200 more than he has on his debit card, which a lot of people will do this holiday season. Assume also that the person has done this with three purchases, at $30 per occurrence, for a total of $290 that he will have to repay the bank when he gets his next infusion of payday cash. That’s 45 percent in simple interest, but in APR, that’s 2,340 percent interest.

Banks make a lot of money from fees

Overdraft fees are the greatest method of generating revenue from bank customers. Considering that the average person pays $620 per year in fees or more, the average person may be better off getting a payday loan a few times per year to head them off. You can read more in the Payday Loan Facts and Statistics Report on Personal Money Market.

Overdraft using debit? Expect to owe some instant cash in bank fees. Image from Wikimedia Commons.

Bank fees are never fun to deal with, but it is ingrained in banking as it is a huge source of instant cash for banks and credit unions. In fact, the pay day that banks get from fees is one of the largest sources of revenue the banking industry has. As the rules for fees on credit cards and other things get more complicated, the fees are going up. There are a few things a person should always watch out for.

Bank fees going up

As new federal regulations come out which limit the amount and the way in which customers can be charged for account services. The major banks are all raising fees, according to CNN. The new laws governing banking and credit cards in the CARD Act place limits on things like overdraft fees. So banks are creating new fees or raising rates on others to get a little more of a pay day where they can. For instance, Bank of America is raising the minimum account balance. If a customer dips below the minimum balance, the bank assesses a monthly fee for doing so.

How overdraft works

Banks previously did not have to inform a customer of being enrolled in overdraft protection. Protection programs can be very costly. For instance, some banks allow account linking and transfers as overdraft protection. A person can transfer emergency money to savings to cover checking. Each transfer will cost you $10 if you bank with Wells Fargo. Then again, that is pretty cheap for a cash advance. Citibank will charge some customers up to $30 a month just for having a checking account with them. A person could wind up needing a payday loan for not spending any money.

Nature of the beast

Banks assess fees for certain things, like going into overdraft. Sticking to the straight and narrow will pay off. The further a person stays from these fees, the less will be paid to the bank.

Sources

CNN

Many major banks have been making the news more recently; this is due to their bad gambling predictions regarding mortgages and their overall poor mismanagement. It would be a very bad generalization and inaccurate to blame all banks for their wrongdoing. The larger banks have been predators preying on innocent consumers for a very long time, while constantly advertising that they care about their consumers. Banks are very vague about mentioning certain things to consumers that might hurt their reputation as a financial institution.

Four things your bank will forget to discuss with you.

#1. Debt Cancellation

While debt cancellation is not regulated as credit insurance, this product is extremely overpriced, but it usually serves the same exact purpose of insurance. When you are unemployed, debt cancellation will pay off your balance. This product is sold and advertised as a “point of sale”. Getting this type of insurance is risky and debt cancellation should always be cheap for the consumer.

#2. Monthly Fees

Banks have made it easier to identify the types of consumers they want by how much they charge for their monthly fees. Many consumers live from paycheck to paycheck and cannot afford to pay a bank’s transaction fees, ATM fees, and the minimum balance out of pocket. There are reputable banks in the market that do charge lower fees for their banking services.

#3. Overdraft Fee Protection/Lines of Credit

Do not be so quick to fall for the double talk that banks use very frequently about overdraft fee protection. You have to read your contract thoroughly. The larger banks are becoming more liberal in regards to their check payments, authorization of debit transactions, and overdraft policies. These large banks did this so you would not have enough available funds in your bank account to cover the expenses.

These banks are getting away with robbing their consumers and they have profited from these practices. The consumers are receiving higher overdraft fees that were illegally authorized and the banks will offer consumers a line of credit to finance the overdrafts. This is a very clever strategy created by many financial institutions across the country. The consumer is stuck with insanely high interest rates that range from 16% to as high as 29%. You have to monitor your account balances because the bank is not going to monitor it for you.

#4. The Teller Fees

Almost all banks have this philosophy; if you do not have a minimum of five figures in your bank account, you are useless to them. Banks have created this type of fee structure for the consumers that they want. If you desperately need or want to use a teller, do not pay for the privilege to use one. The bank does not care; some of these banks will charge you $3.00 or more per transaction for using a teller.

You must read all of the brochures your bank has given to you about their services. You need to pay close attention to the overdraft fees, fee per check, fee per teller transaction, and the requirements for the minimum balance for your account. Many consumers do not take the time to read all of the fine print in their contract, but you do not want to be charged ridiculous fees or be sucked by the bank to take out a loan you did not have take out at all. The customer is always right and you are the bank’s customer. The banks are supposed to serve you, not the other way around.

Credit Unions are an alternative for your financial needs.

If you want to avoid all of these fees completely, you have to go to a financial institution that is more about the customers and not about profiting from the customers. Credit unions are the perfect solution. Credit unions have lower fees and better rates than banks. Credit unions were designed to focus on the customer aspect of banking and not on the profitability aspect that many banks obsess over today. Credit unions generally have the same financial services that most banks have.

The majority of Americans can qualify to become a member of a credit union and, depending on the union, the membership is free. Some credit unions require a very small deposit of $25.00, but it is definitely worth it. Many Americans have not heard or seen anything about credit unions and that is why many of them are not aware of what they offer. Credit unions do not advertise and spend money to make profit from the mass media outlets like most banks do.

Don't be a victim of pricey bank fees.

The payday cash loan industry is a good example of a situation in which a few bad apples spoiled the whole bunch. Politicians and news media only pay attention when people complain. That means the few borrowers who had a bad experience with payday loans have gotten a lot of attention. No one hears about my friend Luke, who avoided hundreds of dollars in bank fees, or my friend Sara who avoided a $100 NSF fee.

Payday cash loans can be a huge help for people who use them correctly. Payday loan lenders’ fees are less expensive than most bank fees, cheaper than letting your car sit in a tow yard or impound lot. It’s when people borrow more money than they can afford to pay back or don’t plan the timeline of their loans right that trouble happens. You can even get an installment loan if you don’t want to pay it off right away.

Save money, don’t waste it

Personal Money Market has contact with payday cash lenders all over the country, and we will find the best payday lender for you. Different lenders charge different rates, but the average cost in the U.S. is about $15 per $100. So, if your  bank is going to charge you $35 for every charge when and after you exceed your account balance, you will save money by getting a payday loan.

I used to have a landlord who charged $25 per day for every day that rent was late. Payday cash loans definitely saved me money when my paycheck came a few days after rent was due. If you’ve ever gotten your car towed, you know how much those places charge to get your car back — and the ridiculous amounts they charge for each day you leave it there. These are all good examples of how payday cash loans can save you money. There is even the option of getting a bad credit auto loan if you need that. When you don’t have cash just lying around and you get into a bind, payday cash loans can keep it from being worse than it has to be.

Getting an online payday cash loan

Personal Money Market can connect you with a lender who will approve your loan online and electronically transfer your cash into your account. Most lenders will get your cash to you in just a couple of hours. There’s no credit check, so you don’t need to worry about a flawed credit rating standing in the way of you getting the help you need.

Your lender will charge a one-time fee that’s due when your payday loan is due. Payday cash loans generally have terms of about two weeks, so be careful when you set the date to pay back your loan. It’s very important that you have enough cash to pay off your full loan and your lender’s fees on the due date.

Get your payday cash loan quick

You can apply right now for a payday cash loan and get approved in just a few minutes. Don’t let any more time go by without getting the financial stability you need now.

To start the application process, just fill in your information below and click APPLY NOW.