I was reading an article in the NY Times last and saw something that will affect us. Some of the larger banks announced that they are lowering their overdraft fees. This is something we’ll keep in mind as we bank with Wachovia (bought by Wells Fargo).
Why are the banks lowering their overdraft fees?
The moves come as lawmakers and regulators in Washington push proposals to reform what critics say are excessive charges of which consumers are unaware. The penalties, known as overdraft fees, bring the banking industry tens of billions of dollars in revenue annually.
What does this mean for you?
Chase and Wells Fargo will cancel fees for accounts overdrawn by $5 or less, according to separate statements. Bank of America will end fees on accounts that are short $10 or less, it said in a statement.
Try online banks as a alternative or supplement
For some people this is a bit of too little, too late. If you want to lower fees and better customer service, look at some of the online banks, like ING Direct. They can offer features that can be a huge improvement over some brick and mortar banks.
Here what I personally like about ING’s Electric Orange checking account:
- No fees. There’s no minimum balance on the account.
- If the money is not in the account, they won’t pay the bill.
- Earn real interest.
Even if you don’t use it as your main bank, you may have your savings account over there to test the waters. That’s what we did when we tried ING Direct out.
There are several other high interest savings accounts, if you are looking for other options. Don’t forget to check out their current rates. Just open an account somewhere that you feel comfortable, won’t get feed for everything, and can grow your money.
What do you think? Will lower overdraft fees affect your choice in banking?
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{ 4 comments… read them below or add one }
This will be a nice way to protect some customers a bit better, but either way it should never come to this in the first place.
I’ve noticed some banks delay posting items, which can cause some problems. My old credit union would show the lower balance while a debit was getting cleared, but if it wasn’t completed in 2 days, the balance would go back to the original amount even with the money out.
Switching our joint bills has made the difference for us. The big issue was customer service at our old bank.
Maybe if people balanced their check books, they wouldn’t overdraft their accounts. It is not the banks job to babysit customers accounts. In most cases if the overdraft is lower then the fee, it wont be assessed. If their is some sort of fraud the amount is returned.
There is a difference between balancing your check book and banks swamping a customer with overdraft fees over something beyond their control (an HR problem). I know that happens and some banks give customers a hard time getting their money back.
If you’ve read the post, you’d notice that I commented that using bill pay can help some people avoid overdraft fees. I also commented that banks have the right to charge the fees, but customers also have the right to take their business elsewhere.
Bank employee:
It’s not my job to fix your grammar mistake, but I’ll help you. It’s ‘there’, not ‘their’.
I should be not respond to comments without having coffee first.