How To Navigate the Bank Fee Storm of 2011
Batten down the hatches: Bank fees have been rising for a number of years, but the "perfect storm" of a weak economy, troubled financial markets and low interest-rate yields produced the 2011 hurricane.
It is time to be a smart consumer and to view bank fees as a drawback to your overall investment strategy. Oversized fees can hurt your personal wealth just as much as a sputtering mutual fund can.
Consumers who have already been pushed to the limit by the depressed state of the value of their homes, stock holdings and job security are definitely not going to calm down.
Keep the following in mind:
You can still find some credit unions, community banks and online banks that offer free checking and lower fees, though this does require doing some homework.
-- You should carefully read every notice that you receive from your bank. If you find that it has initiated or is about to initiate a fee that you're unhappy with, contact it to see if there's any way that fee can be avoided. In some cases, banks may waive a fee if you have a large enough amount in your checking account or have other relationships with it.
-- You should be a squeaky wheel. Banks watched and waited to see how
Since federal law on
In addition, bank overdrafts are the focus of a federal requirement that went into effect on
A recent survey by the
"Consumers can shop around for better fees but need to be careful because it is not as easy as going on a bank's website to get its fee listings," advised
The banks are hoping that you look at this as more trouble than it's worth, Fox said. Also, keep in mind that you shouldn't leave a bank only because it has a monthly debit card fee, she added, since you may not want to wind up at a bank with an extremely high minimum checking balance. That's not helping your financial condition either.
"Banks are definitely scrambling around to try to find ways to make up for their lost revenue," said
The motivation behind increased fees is simply their availability, Banks said. Banks are raising fees across the board in every conceivable way they can think of in order to find more money to improve their balance sheets, she said.
New fees by some banks and other banks playing follow-the-leader is the new reality.
"Increases in bank fees have been a continuing trend for at least 15 years, but they kicked into overdrive in the past year due to regulatory changes," said
Free checking was halted by banks because it lost those other two revenue streams, said McBride. Bank fees have been in line with inflation for over a decade, and the cost of everything is going to increase, he warned. That requires better planning on everyone's part.
This is a year to not only examine bank fees but every fee that can reduce your savings and investment. Pay attention to brokerage account fees, mutual fund fees and credit card terms. Read the small print, open the envelopes and ask good questions. Every little bit can make a difference in a year when investment and savings returns can be either unpredictable or low.
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Personal Finance - How To Navigate the Bank Fee Storm of 2011
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