En español | In addition to death and taxes, consider that third certainty of life: bank fees. Although some have been in place for years, many have quietly been imposed in recent months.
Lost your ATM card? You may have to pay up to $20 for a rush replacement.
Want a paper statement? At some banks, you have to pay a couple of bucks each month.
Making a deposit via your smartphone? Need to talk to a teller? Cashing in coins? Getting copies of checks? There are fees for each.
And free checking? Fewer than half of all banks now offer it on non-interest bearing accounts, down from three-quarters in 2009. You've got to pay fees that may reach into the double digits each month.
Thinking up new fees is the strategy for banks to make back an estimated $12 billion a year in income that they've lost through new federal controls on old fees. Overdraft charges are now more tightly controlled, and banks can charge merchants only 21 cents for processing a debit card purchase (it used to be 44 cents). Banks have lost billions more in income because of the sagging economy, lackluster deposits (who wants to earn interest rates of near zero?), and limits that the Credit CARD Act placed on fee-generating credit card offers.
But hard times for banks don't have to be your own. Fees are here to stay, but here's how to avoid some of them:
1. Understand the fees. Banks don't make it easy. A study by the Pew Charitable Trusts (pdf) found that disclosure documents averaged 111 pages long. The papers are "full of legalese," says Pew's Ardie Hollifield, whose group is urging the Consumer Financial Protection Bureau to require banks to publish a one-page disclosure box of all fees.
Another report by U.S. PIRG (pdf), a consumer advocacy group, found that only about a third of initial requests at branches for fee schedules produce those schedules, as required by the Truth in Savings Act, and only about half of branches provided the schedule after two or more requests.
But, bear down and do your best to understand what you're up against — you can only fight things you know about.
2. Demand waivers. A big one may come with direct deposit. "Even though banks have been quick to scale back on free checking, what they have done at the same time is institute more fee-waiver policies," says industry watchdog Greg McBride of Bankrate.com. "Often, something as simple as having direct deposit of your paycheck or Social Security payment is enough to get monthly maintenance fees waived."
But often you've got to ask for the waiver — it won't be automatically offered.
3. Be a "good" customer. You may think years of your patronage is enough to make your bank want to keep you, if not reward you with waived fees. "But even if you had a checking account for years but it never has more than $300 in it, you're not a profitable customer in the bank's viewpoint," adds McBride.
"Customers who are likely to be rewarded with waived fees are those with multiple accounts — checking, savings, a credit card, mortgage or car loan from that institution." In other words, the more business you do with your bank, the more leverage you have in heading off fees.
4. Sign up for alerts. Some banks allow you, at no charge, to get email or text message alerts of balances. This can help you avoid fees for overdrafts and minimum balances. This little-publicized service generally isn't offered, however, unless you request it. Some online money management sites also provide such alerts.
5. Rethink your checking account. If you have an interest-earning checking account, you may pay an average of $14 a month in fees unless you keep a balance in the thousands, according to a recent study by Bankrate.com. But on non-interest checking accounts, the monthly fee averages less than $5 a month, waived with a balance of $585. To save on fees, consider a non-interest account.
"These days," notes McBride, "the interest you'll get doesn't come close to the fees you have to pay with an interest-bearing checking account, unless you have the higher balance" at all times.
6. Move to a credit union (or just threaten to). On Sept. 29, Bank of America and other banks announced plans to impose a $5-per-month fee for the privilege of using their debit cards. Over the next month, close to 700,000 people opened accounts at lower-fee credit unions, taking $4.5 billion in deposits with them. On Nov. 1, in the face of a public relations disaster, the $5 fee was dropped.
A recent report by consulting firm cg42 predicts that the nation's top 10 banks could lose $185 billion in deposits because of customer frustration in the coming year.
So if you're considering a move — or even if you're not — this might be the time to politely remind your big bank that it isn't the only game in town. New customers take note: Some banks now levy fees for closing accounts opened within the previous 90 or 180 days.
7. Go online. Online banks such as Ally, ING Direct and EverBank have lower overhead than brick-and-mortar banks, which can mean lower fees. Banking online with your current institution also may help you avoid increasingly common charges for paper statements.
8. Think small. While the big banks need to satisfy profit-seeking shareholders, smaller community banksfocus more on their bread and butter: keeping customers happy.
"It was community banks that offered free checking before it became fashionable," says McBride. "Many have been run by the same family for generations, and they built their identity by serving customers without nickel-and-diming them with fees." You can find community banksat this website run by the Independent Community Bankers of America, a trade association.
Sid Kirchheimer writes on consumer affairs for the AARP Bulletin.
Also of interest: Credit unions: Pros and cons. >>