We’ve already seen banks rush to slip in as many money-making fees and raise interest rates as much as possible before the new credit card legislation kicks in in February. For months, banking experts having been spouting predictions on how badly the banks are going to start sticking it to us. Now the banks’ sinister little plans are coming to light.
Even charging as little as $1 a month fee to send customers paper statements can add up. Recently some “store issued”, credit cards, like Victoria’s Secret and Ann Taylor credit cards, started charging this fee. World Financial Network National Bank, who issues these cards, says that the decision to charge the fee is partly tied to the costs that it will incur from the new rules.
Their logic is the “the new credit card laws now have to include significantly more information pertaining to the cardholder’s terms and conditions, thus increasing the amount of paper, production and postal expenses as well as having a greater environmental impact,” the company said in a written statement to the Wall Street Journal. Awww, they care about the environment.
Overdraft charges are not the only way banks have been making money on checking accounts, but they have been severely curtailed as of late. The federal banking system has passed regulations to control the amount banks can charge for overdrafts. So the banks have turned to monthly maintenance fees as a another big profit margin. Gone are the days of free checking accounts.
Banks have gotten creative on how they collect these fees. One bank, BBVA Compass, is promoting a checking account called “Build to Order,” customers customize their accounts from a menu of options such as receiving interest on checking, no minimum-balance requirements or free usage of another bank’s automated teller machines. The first two selections are free; customers then pay $2 a month for each additional feature they choose.
For myself, I recently closed a checking account that decided to charge me a monthly fee. There are plenty of options out there. At last glance, most credit unions still don’t charge maintenance fees or charge for paper statements. To find a good one, you can read our article on how to find a good credit union.
Has your bank notified you of impending new fees and or charges? Tell us about it by leaving a comment!