September 29, 2011
Bank of America has reportedly decided to charge its customers a $5 monthly fee for debit card transactions starting in 2012. Other big banks, including Wells Fargo and J.P. Morgan Chase are also testing debit card fees in certain markets.
But plenty of banks are still offering debit card services without a fee. Consumers Union is offering tips to consumers on how they can avoid new fees and what to do if they decide to move their money to another bank.
“It’s important for consumers to know what fees their bank charges and to understand those fees up front so they can make an informed choice about what they are willing to pay,” said Norma Garcia, manager of Consumers Union’s financial services program. “There are a lot of banks and credit unions that will be eager to attract new customers unhappy with all the new fees that some big banks are starting to charge. Consumers can take some steps to limit fees. But if they decide to move their money to another bank, they should keep a few things in mind to avoid financial headaches.”
Consumers Union advised consumers to keep a close eye on their bank statement to be on the lookout for new fees. New fees will show up first in the enclosures and then on bank statements. If consumers are unhappy with a new fee, they should complain to their bank about it. Consumers should ask their bank what other accounts it offers -one of them may fit with their pattern of transactions better. Some fees are “trial balloons.” The bank may be testing to see if its customers will put up with a particular new fee.
Consumers should check with their bank to find out what steps they can take to avoid monthly fees. Some banks will eliminate monthly fees if consumers use direct deposit for their paycheck or maintain a minimum balance. Consumers should avoid using non-network ATMs. Every time a consumer uses an ATM that is not part of their bank’s network, they get charged by the operator of the ATM and by their bank. That can mean a $5 charge just for withdrawing money from their accounts.
For consumers who decide they want to move their money to another bank, Consumers Union outlined a number of steps consumers should take to move their money safely, including things to keep in mind as they re-route automatic payments and direct deposits and how to avoid losing any money in the process.
Michael McCauley, mccami@consumer.org, 415-431-6747, ext 126 or David Butler, dbutler@consumer.org, 202-462-6262