How to Prepare for the Death of Free Checking Accounts

[SoCalDem]

http://www.mybanktracker.com/bank-news/2010/12/07/prepare-death-free-checking-accounts/



The days when banking customers enjoyed free checking accounts are fading away as banks experience smaller profits due to the new banking rules enforced in the past year. Because banks are revamping their checking accounts, customers need to be more active to have their monthly fees waived.

Opt for Direct Deposit

Many employees still choose to receive their wages in the form of paper checks rather than having paychecks directly deposited into a bank account. Again, direct deposits cost fractions of what it would cost to print and process paper checks. All banks monthly account fees because they’re ensured funds on a regular basis. As soon as you get paid, your bank is holding your money. Be wary of whether or not your checking account requires a direct deposit minimum in order to avoid the monthly fee. For example, a qualifying direct deposit for Wells Fargo Value Checking must be in the amount of $250 or more.

Use your Debit Card More Often

One way to fulfill monthly account fee waiver requirements for Chase Checking and Citi Basic Checking accounts is to make five debit card purchases. You must select “credit” for the transaction despite using a debit card because banks receives a portion of the credit processing charges. Debit cards are often considered less secure compared to credit cards because they offer direct access to your cash as well as fewer purchase protections. Ideal debit card purchases involve small amounts at places such as convenience stores, drug stores, and fast-food restaurants.

Save up to Maintain a Minimum Balance

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[Myrina]

1. I disagree with their 'ideal debit card purchase' definition ...

.... those are the types of purchases that can nickle and dime you to death, and many banks will still authorize the transaction even if you don't have enough funds, so a $5.99 Drive Thru Meal ends up costing you $35.99 with the NSF/"courtesy pay" fee tacked on.

[sammytko]

9. i believe the rules changed on that. You have to authorize overdrafts now

[Myrina]

14. I think terms vary.

I declined to authorize and my credit union will kick back a transaction that's not a 'monthly payment' but regular drafts will still go thru up to $100 over.

In fact, (and this is a rare instance) a couple months ago I set up auto-pay for my mortgage thinking it would take the usual 3 day-to-process cycle that it does with a 'check by phone' authorization and it hit my account on the exact day. My CU paid it, taking me close to $300 over. My paycheck direct deposited the next day so it wasn't an enormous inconvenience but imagine my surprise ...

[Cirque du So-What]

2. Seek out credit unions that you can join

Credit unions will fight until the end to avoid charging for checking accounts. Besides, there's the satisfaction of not supporting the big-pig banking industry.

[pinto]

5. I'll second that. And many CU's are expanding their eligibility guidelines.

:thumbsup:

[Exilednight]

21. Big thumbs up for CUs. I love mine. Mine won't even charge you if you overdraw your account.

[AnneD]

28. Another thumbs up for Credit Unions......

the customers (aka share holders) own the bank, not the other way around. Remember the money is yours not theirs (as my Mom always said).

[femrap]

24. Out here in the 'fly over states,'

we still have local banks. I bank with them. I don't deal with the NYC banks....no progressive should have funds with them. It's like giving your enemy help.

[SocialistLez]

35. I was going to suggest that.

I've considered it.
The only reason I haven't joined the big one in my area is because their interest rate isn't as high as the bank I'm with now.

[Lasher]

3. My bank charges a monthly fee for online access.

It's charging for checking. Calling it something else doesn't change that.

[SoCalDem]

6. Ours does too UNLESS you do direct deposit

which we LOVE:) No need to go to the bank to deposit the darned thing:)

[Lasher]

7. I do direct deposit and my bank still charges for this.

Plus I always have a sizable balance and use my debit card quite a bit. I think I'll call them tomorrow.

[SoCalDem]

8. You need a new bank

:)

A local community bank (if there are still any where you live) will probably give you the best deal..

I would pay them a visit & tell them you are closing your account because of the charges,, they may reconsider:)

[Lasher]

13. My bank has a near-monopoly on ATMs in the area.

Switching to a different bank would complicate my life in that respect.

[AnneD]

30. Try drawing out your money once....

and divy it up by the week. I use an envelope method. It is a lazy but effective way to follow a budget. You spend less when you pay cash. Believe me, you have more time because you are not always running to the ATM.

[starroute]

31. You could ask around about that

My small community bank has relatively few branches, so it compensates by not charging a fee for withdrawing money from other banks' ATM's.

Also, the convenience store down the block (which is unfortunately now closed) had a no-fee ATM, presumably in order to encourage impulse purchases.

So check out the alternatives before deciding you're stuck.

[Cleita]

33. I never use ATMS. I take cash on debit card purchases

at the grocery store. It's free.

[fasttense]

4. Banks are experiencing smaller profits?????

The days when banking customers enjoyed free checking accounts are fading away as banks experience smaller profits due to the new banking rules enforced in the past year???????

"A limited one-time Federal Reserve view, of a secret taxpayer funded “backdoor bailout” by a small group of unelected bankers. This data release reveals “emergency lending programs” that doled out $12.3 TRILLION in taxpayer money - $3.3 trillion in liquidity, $9 trillion in “other financial arrangements.”"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9754613

Only small banks are having problems. The big banks are making record profits thanks to the Fed.

[jp11]

25. I think the issue is with new rules they can't do as much screwing over of customers

which they and other businesses count on to keep growing profits so when they see they can't do that they see it as 'experiencing smaller profits', remember this is America where if you aren't growing your businesses profits every quarter no matter how you are failing.

[NNN0LHI]

10. The bank that I have been with for 21 years fucked me this year on my savings account

Had a small savings account and I noticed the fuckers started charging me a fee of $10.00 a month for inactivity fees. In another few months I was going to end up owing them money. I went up to the bank and was getting about ready to strangle the bank manager before he gave me my money back and closed the account.

This kind of crap was unheard of years ago.

The fuckers.

Don

[sammytko]

11. Wells Fargo has a military banking division - free everything so

does USAA. I never pay fees, no matter the balance

[shimmergal]

12. Living where I live,

(Las Vegas), it's possible to completely avoid banks if you cash your paychecks at a casino.

Of course they do this to make it easy for customers to put a chunk of it into their slot machines, but there's no requirement you do so.

I've nevere actually done this--have s CU account -- but it's a good fallback possibility in case all financial institutions start charging monthly fees.

[prairierose]

15. Move your money....

every penny that someone puts in a major bank allows them the chance to steal that penny and it allows them to pretend that it is business as usual. Move your money to a local community bank or credit union and let the banksters try to get along without any customer's money to steal. They will increase fees as much as the new rules allow to finance their continued gambling and losses.

My CU does not charge for my checking account. I have automatic overdraft protection by keeping money in my savings account and I keep most of my money in an invest account to draw a higher interest rate until I need to use it.

I would rather work with a smaller institution I can trust than ever trust a penny to banksters. But I really have all of the services that I would have at a major bank. Most of them are free. My online banking and bill pay are free.

[MadHound]

16. Switch accounts,

While large and medium size banks are bent on screwing their customers, small regional and local banks are eager for business and will to give you the banking perks that we have all gotten used to in the past. Also, consider switching to a credit union as well. Stop feeding the beast of big banks, go local.

[Coventina]

17. Two words: CREDIT. UNION. n/t

[proud2BlibKansan]

18. (I'm ducking) I guess I'm the only one who really doesn't mind paying these fees.

Other than overdraft charges - which are insanely high - I've never been hit with what I would consider an outrageous amount in fees from a bank. They are providing a service and I don't mind paying for that.

I'd also like to see the bank pay more in interest when they keep our money.

[Statistical]

20. They use YOUR money to generate a profit.

Why should you pay a fee in order to secure them profits?

How about:
"You give me $1000. I hang on to it for a year and in return charge YOU $6 a month to look after your money"

You would think I was crazy right?

[proud2BlibKansan]

22. I earn interest on my savings. So the bank isn't just hanging on to my money.

I agree they don't pay enough in interest on savings accounts. But my checking account isn't full of money they hang on to. I spend it. I pay bills, buy groceries. There is no $1000 available for the bank to hold on to.

And I don't mind paying some fees for the convenience of banking. It's a service.

[Statistical]

26. LOL. You are aware how fractional reserve works right?

You put in $1000 and they pay you what 0.8%.

Then using fractional reverse they can issue $10,000 worth of loans (10x deposited amount). Yes they just make money out of money.
Say they use your $10K to issue a combination of auto, mortg, and credit cards and their yield is 7%.

They make the difference of the 0.8% and 7% as profit. But wait it isn't 7% - 0.8% = 6.1% (which would be generous enough to avoid charging for checking accounts)

No they are only paying out 0.8% on $1K and collecting 7% on $10K (10x as much).


So they collect $700 in interest from loans issued by YOUR deposit and pay out $8 in interest to you. For some reason you think that isn't enough and that charging you $6 a month is "reasonable".

Then people wonder why bankers are greedy. Bankers are greedy because some people think collecting $700 in interest while paying $8 in deposits is reasonable.

[Statistical]

19. You don't need to do any of that ... just find a "bank" that still respect you.

USAA for example:

* no checking fees period (including free billpay)
* interest paid on all accounts
* no fees on credit cards
* free cash advance from credit card to checking account
* reasonable interest rate on credit card
* use anyone atm w/ no fee (USAA refunds ATM charge)
* deposit checks instantly by scanning them w/ computer.
* no overdraft fees if you link a savings account or credit card to checking account

******* When you call customer service you always get a real American (call center is in Virginia Beach near my old home), who is always pleasant and can resolve the issue.

For those who don't have access to USAA look for a credit union. Also some local banks sill treat customers well. The danger there is your local bank gets bought by CHASE or BofA or one of the big 3 in their relentless pursuit of growth.

[bemildred]

23. Switch to a credit union.

Then you will never need to worry about this horseshit again.

[gmoney]

27. "Free Checking" was bait to collect overdraft fees

They were deliberately trying to attract "low balance" customers because of the higher likelihood that they would overdraft, and that's about when they jacked up all the overdraft fees and started manipulating the "float."

It was never about trying to provide a low-cost option to their valuable customers. It was about soaking the less affluent with a bait and switch.

[AsahinaKimi]

29. Debit Cards are the only way to fly

I will never own a credit card again. As for the direct deposit, I have that too.

[Cleita]

32. Or join a credit union.

In a credit union you own shares so not only is your checking account free, as part owner, you earn dividends on it.

[DCKit]

34. "You must select “credit”...", especially when shopping at the Big Box stores.

Use "debit" for the Mom and Pops.