Checking Account Fees Draw Criticism, Target the Poor
Consumer advocates around the United States are becoming increasingly concerned with the number of U.S. banks that are raising the cost of maintaining a free or nearly free checking accounts by raising checking account fees for consumers.
According to reports national banks on average are adding a $10 per month fee to “free checking” accounts, a figure that consumer advocates say targets the poor since they often can not maintain account balances high enough to avoid fees. Some banks also offer free online banks which poor clients often do not have access to and which come with ATM withdrawal fees.
Speaking to the CSMonitorPhyllis Salowe-Kaye, executive director of New Jersey Citizen Action said:
“I think (fee increases) will increase the number of unbanked people we have in New Jersey,” while adding, ”This is not the group of people that they should be looking to make money from.”
To combat the issue New Jersey Citizen Action and other consumer advocate groups are encouraging customers to switch their accounts over to community banks and credit unions which still offer free checking accounts.
Some analysts see the move as a positive effect since more customers are shopping around for better deals, acting responsibly with their money while finding lending and savings institutions that better suit their needs.
In the meantime Citibank just recently announced a checking account increase that will take their basic checking account fee from $8 a month to $10, while the fee will be waived if the customers account has at least $1,500 in reserve or if a savings account is linked with one direct deposit and one online bill pay transaction made each month.
Are you willing to pay increased checking account fees or will you be moving over to a local or credit union based financial institution?