Do you still write paper checks? Well, if you do, say good-bye to Free Checking Accounts and the free incentive gifts that used to go with it. In fact, free paper OR paperless accounts are dying a quick death. And they will soon be a thing of the past.
In a move being spearheaded by Bank of America (with others already in line to follow), customers will soon be required to pay new monthly maintenance fees on the most basic accounts that don’t generate a lot of activity. Meaning, if you don’t spend money frequently in your account or generate late or overdraft fees, you’re a target. So if you wish to avoid a fee, customers will have to either maintain certain account balances or frequently use other banking services, such as credit and debit cards, ATM machines, or online accounts.
“If you put $1,000 in a checking account and don’t do anything with it, it will be hard to get that for free,” says Sherief Meleis, a managing director at Novantas LLC, a consulting firm that advises banks. But some consumer advocates warn the new fees will be detrimental in the long run, since they will whack consumers who keep low balances and manage their accounts responsibly to avoid any penalty fees. “Just because you made a lot of money on overdraft fees doesn’t mean you deserve the income and doesn’t mean you need the income,” said Ed Mierzwinski, director of the consumer program for the U.S. Public Interest Research Group in Washington.
This change in checking accounts comes at a time when banks are attempting to bounce back from the steepest financial losses in a generation, coupled with new government regulations that have been put into place. So to recoup their losses, banks are being creative in an attempt to find new fees for income. And they are increasingly screwing over those low income or low activity customers who don’t generate enough revenue for the bank.
