Banking Fees to Be Reincarnated As ‘Choices’?

Last year, the federal government passed new laws to protect bank customers from onerous fees. So this year, the banks are testing out new ways to charge us for once-free services like checking accounts.

President Obama signed the CARD Act in 2009 to end “the days of unfair rate hikes and hidden fees,” but many financial experts surmised the banks would just dream up new fees that found some loophole. Money Talks News founder Stacy Johnson even predicted that free checking accounts could go “the way of the dinosaur.”

Sure enough, one month in to 2011, and the banks have already proved him right. Bank of America and Chase are taking the lead – and the headlines.

Bank of America is testing out a new program in Arizona, Georgia, and Massachusetts. Customers there now get to choose from multiple types of checking accounts. The catch? Monthly fees of $6 to $25, depending on your choice. (Customers can avoid fees by linking multiple accounts, for example.)

The Associated Press called the program “the latest in a series of moves by big banks that signal the end of free checking accounts.”

Starting Feb. 8, Chase will enroll new customers in a new “Total Checking” account, MSN reported. The catch? A $12 annual fee.

Also starting in February, the free checking accounts of former Washington Mutual customers will be replaced with fee-based accounts from JPMorgan Chase, which bought Washington Mutual in 2008. Again, to avoid the new fees, customers will have to meet certain requirements, like maintain a minimum balance, according to the Wall Street Journal.

If you bank with one of these companies or are worried your bank may be the next to institute fees and call them choices, be sure to read Stacy’s three tips for how you can still get free checking. And this one: Hate Your Bank? 3 Steps to Ditch Em.

Stacy Johnson

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  • The choice anyone dumb enough to keep sending money to banks should make is to switch to a credit union. Not only did my CU not charge me one red cent for checking last year, they actually paid me over $100 just for using my debit card. That’s pretty substantial considering the average balance was only around $1000.

  • Me too, Me Too! I encourage everyone to check out credit unions. I got tired of M&T nickel-and-diming me and was surprised to find out how easy it is to qualify to join credit unions and did so in December.

    I’ve never worked for the state government but I found I qualified to join SECU, the State Employees Credit Union (of Maryland), because I’m a graduate of a state public college! Having a relative who is a member would have worked as well. It has branches near me and across the state.

    It has more ATMs than M&T and is part of a no-fee network of 60,000 ATMs nationwide as well as in the UK and Australia! It has 2% CDs [only 3 months penalty for cashing in before maturity], free checks, no debit card swipe fees, no charge for covering checking account overdrafts if there’s enough in your savings account, a higher interest rate on checking accounts than on M&T’s savings accounts, etc.

    Two days after I switched most of my nest egg over, M&T must have gotten the check switching my money to SECU and I got a phone call asking if “M&T was meeting all my needs?” I explained I was furious about a number of recent developments, and the straw that broke the camel’s back was to be charged for checks for the first time in my 40 years with M&T or the bank they absorbed, only to hear on Oct. 21st that they had a record quarter, with a 52% increase in profits. Then, I received a “Happy New Year” letter from the President of M&T saying “our commitment to you hasn’t changed!” Well, since it hasn’t changed, I’m going to make darn sure I close out my accounts as soon as all my automatic payments, deposits, etc. have switched over to the credit union!

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