Late fees, loan-origination fees, over-the-limit and overdraft charges helped generate 53% of banking-industry income in 2008, according to Bob Hammer, chief executive of bank-card advisory firm R.K. Hamme, up from 35% of income in 1995.

Here are the ways they do it:

1. Checking Account Service fees. Consumers shouldn’t assume their checking accounts are fee-free or, if they are, that they will always continue to be so. Indeed, my own one-free checking account from Bank of America started sporting a $10-a-month fee after 15 years of being a free account.
2. ATM Fees. If you use an ATM that doesn’t belong to your bank or doesn’t have an agreement with your bank, you could get whacked twice — once by your bank and once by the bank whose ATM you’re using. Fees typically range between $2 and $4.
3. Overdraft Fees. I used to think the payday industry was the worst ripoff in the banking fee industry. Overdraft fees from your bank carry interest rates on your temporary “loan” from the bank which are even higher. For instance if you bounced a $100 chaeck, and the fee was $30 dollars, your annual interest rate would be 1560%, vs. the normal 455% annual interest rate for a payday loan. Along with ATM fees, overdraft fees are the most lucrative for banks.
4. Deposit Returned. If someone else bounces a check on a deposit made to you, banks are going to hit you up with this fee. It’s one of the reasons, in my opinion, that paper checks are going the way of the horse and buggy.
5. Tellers. I find this fee outrageous, but some banks are charging fees for “excessive” visits to their brick and mortar banking centers.
6. Inquiries Over the Phone Can you believe this? Now banks are asking you to pay for systems they implemented to save them from having to pay a live human to answer your call. If you call too often or in some cases at all, to access automatic phone systems for balances, ordering checks, etc., you’re going to get this fee. Fees range from 50 cents to $5.
7. Closing Accounts. When you get tired of banks taking your money via excessive fees and you stand up for yourself by closing your accounts, banks are sometimes charging you money for the privilege – between $5 and $25!!
8. Currency Conversions. We did a whole write up about this a while back. It’s not just when you’re traveling in another country but includes buying things online from foreign countries.
9. Credit Card Fees in the Wake of New Legislation. The new credit card reforms passed by Congress will probably push credit card fees higher as bank try to make up the loss of their usurious fees. Industry experts are also predicting the end of the grace period, which is the period of time you can carry a balance for free.
10. Credit Card Annual membership Fees. Savvy credit card shoppers have long looked for cards which carry no annual fee. Expect these types of cards to become extremely scarce.

Does anyone else have unexpected banking fees they want to talk about? Leave a Comment!

Source: Wall Street Journal article

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