Not that long ago, it used to be that every bank offered some kind of free checking account. Of course, these accounts weren’t actually “free”. Overdraft fees, ATM fees and a host of other fees, coupled with revenue from credit cards, allowed banks to offer free services. As long as you were a responsible customer, your account was free while someone else’s fees paid for it.
Now, new Congressional regulations like the CARD Act have limited the amount of money banks can make from credit cards. The Federal Reserve also has plans to address the highly lucrative “overdraft fee industry”, estimated to be worth $38.5 billion in 2009 by industry consultants Moebs Services.
In other words, free checking accounts may soon be going the way of the dinosaur. Fortunately, you can still find free checking if you know where to look.
The Simple Solution
Just ask! If your bank takes away your free checking, but you’ve been a good customer, talk to a branch manager. They may be able to make an exception for you and it never hurts to ask.
The Credit Union Solution
You might not have considered them before, but Credit Unions are typically smaller and more local than banks, thus much more likely to offer free checking as an incentive to bring in new members.
“Absolutely, we are the best free checking in town, no minimums, no monthly fees, unlimited transactions, even a rewards program on your debit card usage.”
-Joyce Gaines, BrightStar Credit Union
The Online Solution
If you still can’t find free checking at a bank branch near you, you might want to check out online only checking accounts. Since they have no branches to pay for, they’re much more likely to offer free checking and usually pay higher interest rates for your deposits. So, if you get paid (or have the option to be paid) through direct deposit and get all your cash from ATMs, there’s no reason why you can’t simply forgo the brick and mortar bank altogether.
Bottom line? The best things in life aren’t fee, they’re free. So if your big bank is trying to make up losses by cahrging for your previously free checking… take a tip from McGruff and “just say no”.