Bank of America is at it Again

Long time readers will remember an article I wrote last October about Big Banks wanting to charge $5 to account holders who use their debit cards. As we all know consumers revolted against this fee and the big banks thankfully relented. Now it seems that one of the Big Banks, Bank of America, is back at it, trying to figure out how to charge fees to its customers.

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A recent article by the Wall Street Journal reported that Bank of America is currently testing charging higher fees to account holders in Arizona, Georgia and Massachusetts who fail to maintain a certain monthly balance, buy other Bank of America products or bank strictly online. The new fees range from $6 to $25 a month, MUCH higher than the previous $5 debit fee that they tried to charge.

It seems the Big Banks have not learned their lesson. If they can’t implement fees in one area, they try it another way.  They will go to any length to abscond with their customer’s money in the form of fees and hidden charges. What they don’t seem to realize is that they are building a bad reputation among consumers. There is a growing feeling among consumers that these banks are just out to squeeze as much profit out of account holders as possible, instead of giving them great service for a reasonable price.

In fact studies show consumers are fed up with big banks and their fees. Last year credit unions more than doubled the number of new accounts. More than 1.3 million Americans opened new credit union accounts last year, up from less than 600,000 in 2010. Most experts agree that those numbers will continue to grow if banks keep acting like they have no competition.

More and more consumers are choosing credit unions because they are seemingly the antithesis of big banks. Credit unions are not-for-profit financial institutions. They are owned and controlled by their members, not stockholders or people only concerned with the bottom line. Despite these differences, credit unions still offer most of the same products and services as the big banks do, savings and checking accounts, loans, ATMs and online banking just to name a few. And because they are controlled by their members (not stockholders), they often can offer better rates and lower fees than other bigger banking institutions.

A recent voter survey by the Credit Union National Association found that more Americans believe credit unions are safer places to sock away their money than banks. 40 percent of consumers choose credit unions, while just 34 percent said banks were safer. Just four years ago that same annual survey went a completely different way. In 2008, 72 percent of respondents believed that banks were the most financially safe and sound institutions. That’s a four year decrease of a whopping 38 percent.

I’m seriously considering making a change myself. So far my Bank of America accounts are still free to use but when they start implementing fees for me to use my own money I may switch financial institutions. The problem with switching banks is that most people wait until they have to switch banks and then their choices can be limited.

You’ll find the best banking options if you invest a little bit of time and research into your hunt. Since I know most people would rather be spending time with their kids or doing something fun as opposed to researching new banking institutions I’ve done it for you. ?

First thing you should do is ignore banking promotions. Most people are drawn to their new bank with promises of gift cards, monetary rewards or teaser rates. While those are nice perks, they won’t last you very long and then you’ll be stuck with another bad bank. Instead check out findabetterbank.com. This website was built to help consumers find the best banking institutions based on their individual needs. It’s really easy to use too. When I went on the site I moved the arrow one way or the other to indicate what options were must haves and what ones I didn’t care about. You’re asked about online banking, ATM usage, direct deposit, interest rates, and a few other things to help them find the best financial institution for you and your life. When I did it, it took me about three minutes to answer all the questions. Then it spit out a list of potential banks in my area that match my criteria.

For me the best fit seems to be ING Direct (an online only bank). I’ve always had a bank that has physical locations before so this would be a change for me. For some people this is an important feature, but for those of us that do most of our banking online it can be a great option. Online banks are worth checking out because they usually offer the most competitive interest rates. Their low overhead expenses and fewer employees allow them to offer what are usually the best interest rates that are out there.

Remember those pesky fees we’ve been discussing? Online banks are also worth considering because they typically don’t charge fees that traditional brick-and-mortar banks do. You won’t find debit card usage fees or check writing fees from one of these financial institutions.

I can almost hear you saying, “Yea, but sometimes I have banking questions and issues that I need to talk to someone about. That’s why I need physical locations to go to so I can get help.” Most online banks have 24/7 customer service hotlines for assistance. Most traditional-brick and-mortar banks don’t even have that. Consider your past banking habits, do you absolutely need that face-to-face interaction to solve your banking issues, or can it be done with an internet connection and a phone call?

The only downside to online only banks are access to free ATM’s. Online only banks have a smaller ATM network than big banks do, so getting cash can be a challenge in more rural areas. You can still get cash from ATMs that aren’t for your bank but you’ll be charged a fee. You’ll need to check out the banks website to find out if there are convenient ATM’s in your area to see if this would work for you.

The most important thing to remember is that you don’t have to stick with a big bank, you have other options.  Local credit unions, online only banks and informational websites are out there to help you make the best choice for you. What kind of bank do you currently use and do you think you’d ever consider switching? Leave me your answers in the comments section.

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Keeping Money in Your Pocket,

Nancy Patterson

11 Responses

  1. Honest1inVA

    TAKE YOUR MONEY OUT OF THE BANKS! IT’S NOT SAFE THERE ANYWAY–ESPECIALLY COME JUNE AND THE OPENING OF THE P-A-G-E IN SHANGHAI!!
    BETTER TO GET OUT NOW!! USE MONEY ORDERS TO PAY BILLS–TRADE THE REST FOR GOLD AND STICK IT UP YOU REAR END!!

  2. Jerri Kurdila

    I use Perkstreet Financial, an online only bank that uses some ATM’s in my area. They also give you 1% back on your non-pin purchases so you can get money back for using your money. I direct deposit part of my paycheck in there every 2 weeks and I don’t think they’ve charged me any monthly fees.

  3. pete

    Typical of more and more US corporations.customer service is a joke ever since accountants became drivers of corporate policy

  4. Ralph

    Why even have a bank, they don’t give you interest and yet they expect you to always pay. Under the mattress is still the best bet.

  5. Peter

    No hard feelings…nothing personal but you sound, behave and proceed like a beat up /abused wife…Oh! no…he didn’t hit me, it was my fault, I tripped on the carpet, etc, etc.
    If you know, for sure, as we already know… that Banks are the biggest disgrace in our life, literally…why such an obtuse statement such as: “I’m seriously considering making a change myself. So far my Bank of America accounts are still free to use but when they start implementing fees for me to use my own money I may switch financial institutions. The problem with switching banks is that most people wait until they have to switch banks and then their choices can be limited.”

    How many times must you, anyone or “that” wife wait to take “action” once and for all?

    We Americans can not stop from being pathetically lazy, ignorant and most of all turn around and show face as if nothing has happened. Is that what many considers as being “complacent”? Same ignorant animal with a different outfit.

    As far as I’m concerned I found – on my own research – long ago who Bank Of America is & what they were doing. From that moment on I simply keep it next to my toilet trash bin. So everyday I hear something about it I automatically flush it! In fact all Banks are the same one way or another. But you know what? I have not use any Bank during the last 10 years & my life has been just wonderful. The problem is that 99% of the population still live like a “Puppy salivating” aka/ “conditioned” to do what you’re told or to impress others following the peer pressure. Let’s stop being so hypocrites… Wake up America!

  6. jan

    Credit unions can be a problem because if the branch isn’t near you, atm fees can be killer because they must use other banks and get charged for it. And if you need to make a cash deposit the branch location can make it difficult – ATM deposits take longer because it has to go thru so many hands.

  7. Marina Smiley

    Thank you for this info.

  8. Marina Smiley

    Thank you for this info

  9. John

    You can beat the big banks in court over any “loan” you get because banks do not actually lend anything. Can you say “breach of contract” and “transaction account”? Pure profit for the banks. Not so with credit unions which operate legally. See bottom of pg6, top of pg7 in “Modern Money Mechanics” published by the FRB Chicago.

  10. Allistair

    In Canada, you can not join an “on-line only” bank (like ING Direct) without having an account with a “brick-and-mortar” bank. Is it not the same in the USA?

    For Canada, the real value of having an ING Direct account is that they usually pay a much better interest rate on your savings. But, since you MUST also have a (related) account at a “brick-and-mortar” bank, you are still (usually) paying a fee to the “brick-and-mortar” bank (lol).

    Thank you for reading.

  11. League of Power

    Hi Everyone,

    Thanks for the great feedback as usual. Some of you mention not using a bank at all. While I can certainly understand that argument…
    The convenience of paying all your bills online and auto-pay would be hard to give up, for me at least.

    I hear you on the ATM fees. Though there are some credit unions and brokerages that waive or refund ATM fees.

    The point of the article is that there are free options still out there. Another alternative I did not mention is using a brokerage account for checking.

    And sorry Canada it looks as if I’m of little help with this one.
    Thanks for sharing @Allistair

    @Peter I think your analogy is way off base. As a general rule if anyone starts a sentence with, no hard feelings, nothing personal, I’m not racist but, or no disrespect… something hurtful, personal, racist, or disrespectful is going to be said.

    After re-reading that sentence I guess it could have been more direct.
    The bottom line is I’m still with BofA because it is convenient and still free. If that changes I’ll find another alternative, most likely one I’ve listed above.

    I guess it’s a shame we can’t all be as motivated, intelligent, and enlightened as Peter.


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