Free checking gets harder to find as bank fees skyrocket
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SEATTLE -- A new study shows many of the major bank fees are now at record highs. But with just a little bit of effort, you can avoid most of these fees.
Here are the key findings from the Bankrate 2012 checking survey:
"The availability of free checking continues to decline," said Greg McBride, Senior Financial Analyst at Bankrate.com. "At this point, just 39 percent of non-interest accounts are available for free with no strings attached. And that's down from a peak of 76 percent just 3 years ago."
Why is this happening?
"The decline of free checking and the acceleration of bank fees is attributable to two regulatory changes that have left banks with a big revenue gap to fill - restrictions on when they can charge overdraft fees and restrictions on how much money they get when consumers swipe their debit card," McBride said. "Both have left them a big revenue gap that they have to fill either by raising other fees or eliminating the free checking account."
The survey shows that you can still get a free non-interest checking account at most banks, but it may require a minimum deposit or signing up for direct deposit of your paycheck or Social Security check.
Of course, there is another option: move your money. Look for a financial institution - a credit union, community bank or online bank - that offers totally free checking with no requirements to qualify. Bankrate found that 72 percent of the largest credit unions still offer free checking.
Here are the key findings from the Bankrate 2012 checking survey:
- The average monthly maintenance fee for a non-interest checking account is now at a record high of $5.48. That's a jump of 25 percent from last year.
- Overdraft fees are also at a record high -- the average overdraft fee is now $31.26.
- And the cost to get cash from an out-of-network ATM is up dramatically. Expect to pay an average fee of $2.50 to the owner of the ATM-- a new record -- plus your bank will charge you another $1.57 on average, an increase of 11 percent.
"The availability of free checking continues to decline," said Greg McBride, Senior Financial Analyst at Bankrate.com. "At this point, just 39 percent of non-interest accounts are available for free with no strings attached. And that's down from a peak of 76 percent just 3 years ago."
Why is this happening?
"The decline of free checking and the acceleration of bank fees is attributable to two regulatory changes that have left banks with a big revenue gap to fill - restrictions on when they can charge overdraft fees and restrictions on how much money they get when consumers swipe their debit card," McBride said. "Both have left them a big revenue gap that they have to fill either by raising other fees or eliminating the free checking account."
The survey shows that you can still get a free non-interest checking account at most banks, but it may require a minimum deposit or signing up for direct deposit of your paycheck or Social Security check.
Of course, there is another option: move your money. Look for a financial institution - a credit union, community bank or online bank - that offers totally free checking with no requirements to qualify. Bankrate found that 72 percent of the largest credit unions still offer free checking.
Just do a little shopping around. Â Credit unions are no different than banks, some are better than others, same with banks. Â I've seen plenty of banks offer the same accounts as my credit union. Â Find one that fits your needs and don't be afraid to move to another, it's pretty easy to do.
Yep, Credit Unions. I have never regretted changing over to a CU.
Ahhhh!!! I love my Credit Union!!! FREE TO JOIN!! Same services as a bank, smaller interest on credit cards, Free checking, Free online bill pay... You have to be retarded not to join one!!
Go to a credit union. Banks are a rip off. Period. Especially anyone who has checking with the same bank that holds their home loan, everything should be free. Banks have become criminal.
This needs to be printed in all capital letters:Â JOIN A CREDIT UNION!
 @Furd I have a credit union account and I still get fees but usually for international transactions like trying to deposit a check. First Tech Fed wants to charge $25 to send the check to an independent processing house via FedEx then they want to charge $100 to have it verified with the bank that issued the check in the first place. Now my problem is that the check is less than $100 so I am actually losing money every time. You are probably thinking, well just have the money put into USD but that's easier said than done when it's a government check being issued. I do however have a bank account with Opus Bank (formally Cascade Bank) and they don't charge foreign transaction fees, nor do they penalize you for having less than (insert some ridiculous amount of money here). I think it pays to shop around and see where you want to park all or even some of your money.Â
 @PrairieDawn How many people are in your situation, maybe one in a hundred? Maybe even less than that? For every rule there is an exception and you are the exception in this case.
 @Furd I totally agree, I think people just like totally wasting money or something. My friend has a Wells Fargo account, and once a month they have to transfer $75 from their savings to their checking account, just to avoid having a fee from the account. What kind of a bank NEEDS you to move money around, just to not get penalized? I find it ridiculous.  I've had (3) different credit union accounts, 2 small, one large (BECU), and I haven't looked back since!
Who is getting charged these fees?Â
Plan ahead:
- Do not use ATM's if they are going to charge a fee.
- Do not over draft.
- Do not fall under any minimum balances.
- Do join a credit union.
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It's pretty simple. I think I might have paid a couple ATM fees when ATM's were first introduced, but I tired of that rather quickly and haven't paid one since (20 years)?
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 @Stock Woodie Love your thinking. Too bad we have people who need to be saved from them selves.
Anyone still with a bank at this point is asking for it.
@DontTreadonMe And there is the reason for the hikes in a nutshell. Too big to fail are making consumers move and in addition, the fees for laundering government drug/gun money are up as well.