How to Avoid Banks’ New Fees

Bank rate fees are once again on the rise as big financial institutions struggle to loosen the noose Congress put them in last summer after passing financial reforms.

Congress sought to limit the fees and penalties banks could charge customers, and also slapped limits on bank credit card fees, but banks have had no trouble finding other places to make customers pay.

For their part, banks argue that the limits are unfair. A 2010 study by Celent says that banks lose money on about half of all checking accounts. Furthermore, it costs banks up to $300 annually to service the approximately 200 million checking accounts active in the U.S. today, the group adds.

So what are the big banks doing? Creating new fees. Here’s a look:

Bank of America – Bank of America is charging $8.95 in monthly maintenance fees on most of its checking accounts.

Avoid it: If you can keep at least $1,500 in the account, or make one direct payment from the account each month, Bank of America says it will waive the fee. But don’t get too comfortable; the bank already has plans to charge checking account customers $9 per month for basic checking accounts – with some severe restrictions.

J.P. Morgan Chase – Chase is banking on its new “Total Checking” account program to shore up its revenue base. The banking giant will hit customers with a $12 per month fee, with some exceptions.

Avoid it: Like with B of A, you can dodge the $12 fee by keeping a minimum of $1,500 in your account. You can also avoid the fee if you commit to making at least $500 in direct deposits each month or keep at least $5,000 across all of your Chase deposit accounts.

Citibank – Citibank is coming in a bit lower than its competition on its monthly checking account fees - $8 per month for another one of those maintenance fees, unless you can satisfy certain direct deposit, debit card usage, and online bill payment requirements.

Avoid it: Requirements vary, but similar guidelines as other banks for minimum balance and direct deposits will help you avoid the monthly fee.

Wells Fargo and Wachovia – Both banks have basic checking account fee programs that charge up to $10 in monthly fees.

Avoid it: Again, the way out is minimum account balances ($1,500 for Wells Fargo; Wachovia is keeping free checking, but raising fee rates on things like paper statements and overdraft protection.)

If you think you’ve hit a brick wall and can’t take anymore monthly checking account fees, try opening an online account. They usually come with low or no fees, though you will have to give up paper statements.

Or, better yet, try your local credit union. They’re usually more amenable to waiving fees, and most still have “no strings attached” free checking account deals.

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