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New $5 ATM fee just the latest checking trap



"Total Checking." "Value Checking." "MyAccess Checking." What do they all have in common? The word "free" is missing from the name. You are likely painfully aware that big banks like Chase, Wells Fargo, and Bank of America have ended no-strings-attached free checking accounts. But if you had any questions about how restrictive -- or expensive -- those strings can be, consider Chase bank. Scarcely two years ago, we marveled at banks? efforts to inch fees up to $3 per withdrawal. Chase bank is now test-piloting $5-per-withdrawal fees for non-customers in Illinois. That's in addition to fees the consumers' bank charges. Soon it may cost $10 to grab $20 in a pinch.
Once upon a time, consumers could expect to earn money by leaving their cash sitting in a bank. Today, consumers must worry about their bank slowly bleeding money out of the account. The change is happening swiftly. Chase says it's converted around 8 million free accounts -- many former customers of Washington Mutual -- into "follow-our-rules-or-pay-up-to-$144-annually" accounts.

It costs banks about $300 apiece annually to offer checking accounts, according to a recent study by Bretton-Woods. They used to recoup these costs by helping themselves to some $30 billion worth of overdraft fees from consumers. But now that the cash cow has been largely eliminated by new consumer regulations, banks are trying out new techniques to recoup this lost revenue.
Just how far will banks be able to push fee-weary consumers? That's unclear. Earlier this month, Bankrate.com released a survey showing 75 percent of consumers earning $75,000 or more would rather switch banks than pay higher fees. Overall, 64 percent of customers said they'd bolt.


That ire may not translate into action, however, and banks know it. A J.D. Power study released on March 1 found that, while consumers are switching banks at a slightly higher rate than in the past (8.7 percent last year, compared to 7.7 percent a year earlier), fees and interest rates have almost nothing to do with their choices. "Pricing" impacted only 4 percent of consumers, the study found.


This would not be a surprise to behavioral economists. Consumers almost never consider fees -- particularly punitive fees like overdrafts or "your balance fell below $1,000" charges -- when making purchase decisions. Nearly everyone suffers from what's sometimes called "magical thinking" -- as in, "I'll never misbehave and get hit by that fee."


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1) Soaring ATM fees
We've already mentioned Chase's $5 experiment. Plenty of folks now pay $6 or $7 per withdrawal, when the ATM machine fee is added to their own bank's fee. These fees are perhaps the best example of magical thinking at work. Most folks think they'll be good about walking the extra block to access cash at their bank's ATM. But when there's a screaming kid in a stroller or an impatient date on the arm, you're likely to just pay the fee. Even one so-called "foreign" ATM transaction with a $5 hit every month costs $60 annually. Be realistic: If your bank charges for such transactions, you should just budget $100 annually for ATM service. But a much better choice is to find a bank that doesn't charge you. For those ATM emergencies, you'll at least cut your ATM fees in half, and some banks -- USAA Federal Savings Bank, for example -- refund the ATM bank?s fees.



What it costs: Two ?foreign? withdrawals per month -- $120



2) Keeping your minimum balance
What it costs: Two slip-ups -- $24


3) Overdraft fee marketing
What it costs: Two overdrafts -- $70


5) The hidden cost of no interest
Of course, requiring a minimum balance of $1,500 or so is itself a fee. That's money you could park in a high-yielding money market account earning interest. Even a 1 percent interest rate would get you a smidge more than $15 on your $1,500, so that kind of minimum requirement amounts to a $15 annual fee.
What it costs: Missed interest -- $15

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RRK;378784New $5 ATM fee for withdrawal - Do you support ?

Hell no. If you can find find another financial institution that doesn't charge such hefty fees then switch. If you don't/can't find one, unfortunately, you're stuck and have to keep paying these rip off fees to these blood sucking financial institutions.