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Connecticut BBB Alerts Consumers to Prepare for New Banking Fees
The Days of Free Debit Card Use and Checking are Disappearing for Many
Banks charged an average of 44 cents per debit transaction, however, October 1, 2011, the Dodd-Frank financial reform act capped that “swipe fee” at 21 cents.
Banks estimate they will lose hundreds of millions of dollars a year in debit card transaction fees and are testing the waters to recoup that money from customers by modifying various checking account fees.
The federal banking regulation changes were designed to put more money in the pockets of consumers, however, unfortunately, there is no sign that retailers will pass the savings on to customers.
Some of the nation’s largest financial institutions already have announced a flat monthly fee for customers who use their debit cards for purchases. Some banks are rolling out new checking account fees of between $3.00 and $5.00 per month for debit card purchases.
Apart from flat rate, monthly debit card fees, other changes may involve:
Per transaction fees – For limited use or if there is no monthly fee, there may be a 10 to 25 cent fee every time you use your debit card. That still allows cash back from retailers for debit card purchases and is still is less expensive than withdrawing cash from an out-of-network ATM or standalone ATM, where withdrawals often cost $2 per transaction plus an additional fee charged by your own bank.
Rewards programs - Frequent flyer miles and other perks associated with bank card use cost the banks. These programs may be scaled back or eliminated.
Higher minimum balances – Some banks waive fees if a minimum amount of money is held in an account to keep in your bank to avoid debit card and other fees.
To avoid the costs, analysts say consumers may gravitate towards smaller banks and credit unions for their primary checking needs.
Connecticut Better Business Bureau recommends consumers keep a watch out for related correspondence from their financial institutions, check terms and conditions associated with their bank accounts, watch their banking statements for new fees, and call their banks to determine whether new fees will be imposed, how much, for what services and when these could come into effect.
Inquire about “special relationship accounts,” which waive many common banking fees and above all, if you are not pleased with your bank’s changes, shop around.
For tips on smart money management, visit http://www.bbb.org/
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Founded in 1928, Connecticut BBB is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. For more advice on finding companies and businesses, start your search with trust at www.bbb.org.