An end to free checking?

Consumers keep getting hit by fallout from the banking crisis.

The Wall Street Journal is reporting that Bank of America and other banks are preparing new fees on basic services as they try to replace revenue lost to regulatory rules.

This is expected to spell an end to free checking accounts for many Americans, the WSJ writes.

Free checking accounts, which have been widely available for more than a decade, have been a boon to middle-class consumers and attracted low-income customers to the banking system for the first time, the WSJ says.

But customers will likely be required to pay new monthly maintenance fees on the most basic accounts that don’t generate a lot of activity.

To avoid a fee, customers will have to maintain certain account balances or frequently use other banking services, such as credit and debit cards, automated teller machines and online accounts, the WSJ reports.

“If you put $1,000 in a checking account and don’t do anything with it, it will be hard to get that for free,” Sherief Meleis, a managing director at consulting firm Novantas LLC, told the WSJ.

How will this affect you? Will you search for free checking from banks that will still offer it?

Do you think this could be a boost to credit unions? The mattress business?

For instant updates, follow me on Twitter.

66 comments Add your comment

Lancer

June 17th, 2010
8:18 am

I will search high and wide for a bank that offers free checking. I expect many people to follow suit.

Brian

June 17th, 2010
8:21 am

I’ve already switched much of my banking to credit unions. Looks like soon, it may become all.

Sea Island

June 17th, 2010
8:22 am

I agree. Free or it’s not for me.

Mary

June 17th, 2010
8:35 am

Time to start looking at credit unions…

I’m just about sick and tired of paying for all these damn bailouts. Why should I pay for all this crap? I’m not the one who messed up. I know how to manage my money, and I’m should not be financially responsible for those who can’t seem to do the same.

Now Atlanta Gas Light was it’s customers to pay for a $25 MILLION project at Reynolds Plantation.

Why am I, a single mom, forced to pay for all this crap?????? I’m not part of the problem. I didn’t go into massive debt for a house I couldn’t afford, a car I couldn’t afford, nor did I max out credit cards, etc. I live a simple life, yet I’m taxed to death for other’s failures. I have NO debt, but pretty soon, I’ll have no income, since the government wants ME to pay for it’s failures…….

How much longer are we going to sit back and allow this happen?

larry

June 17th, 2010
8:35 am

Credit Unions have already started charging a monthly maintence fee if your balance falls below a certain level. Ours is $7 if our account falls below $300. We are looking around.

WM

June 17th, 2010
8:36 am

Making up for lost revenue my rear-end. I would imagine the minimum balance requirement for the checking accounts would start at $250. Get ready to read in the fine print, which the banks already know people don’t read the fine print (see recent mortgage mess), the following statement: “A minimum balance charge of $30 will be charged if the account balance drops below $250 at any time during the statement cycle.” To some maintaining a balance is easy, but to others (especially those whom free checking was initially marketed too) it will be a difficult task. All this fee will do is lead to more fees, particularly overdraft fees. The bank can mask the reasoning as “…making up for revenue”, but the truth is, is that it costs the banks nothing to operate the free checking account. Think again about who those accounts were originally marketed too. Individuals who keep low balances, use the check card, visit ATMs, & have a past history of overdrafts. So again, lost revenue my rear-end. They’ve already lowered interest rates on CD’s, mm accounts, interest bearing accounts, while upping the OD fee, foreign ATM usage fee, etc. etc.

CommonCents

June 17th, 2010
8:39 am

If you put $1,000 into a checking account and don’t have any activity on it, that money would be better placed in a savings account, money market, mutual fund, CD, etc. Keep the minimum balance and use the account to avoid fees, sounds simple enough.

Piggy Bank

June 17th, 2010
8:57 am

Looks like I will be looking elsewhere if the fees start rolling in. And what a pain. Changing your direct deposit, all the other crap that goes along with the whole personal banking setup.

WM

June 17th, 2010
9:00 am

One other note, I love the statistic: “It costs most banks between $250 and $300 a year to maintain one of the roughly 200 million checking accounts.” I just wish the author of the WSJ article would have dug a little deeper to see the breakdown of those accounts, as that number groups all types of checking: free, interest, high yield. And CommonCents, you make a very valid point (& one I share), however if you have a $1000 why would I put it in a bank product that pays next to nothing in interest? And the bank is losing money on those accounts because they are paying you interest (albeit a nickel or two) while generating little revenue.

My 2 Cents

June 17th, 2010
9:15 am

I have Wachovia and will look elsewhere if they try to implement fees.

Morrus

June 17th, 2010
9:25 am

Curiously, in a supposed anti-incumbent year, most of the departing are not retiring but seeking higher office. We may recycle more than we replace. The bad news is that a frustrating 114 seats still have but one contestant. Two of them aren’t even incumbents, meaning they will affect state policy without being vetted by voters. And I have to think that we’d be better off if many had run instead for the Legislature — and cut down on the number running unopposed. Georgia’s problems are numerous. They aren’t going away. There’s too much stale thinking at the Capitol, on both sides of the aisle. New voices would be welcome.

TnGelding

June 17th, 2010
9:49 am

I appreciate the free banking, but it irks me the way they over-charge the poor. Why not give it to them free and charge those that can afford to pay? I won’t change my account in search of a better deal.

I would think they would love for you to put a thou in checking and let it sit. They’d have use of the money for practically nothing.

Maynard

June 17th, 2010
9:56 am

I live on a cash only basis. I cash my paychecks and keep my cash. I pay my bills with cash or money orders. I refuse to give anymore of my hard earned money to these shysters.

And another thing, I will never fly on an airplane again……go read how airlines made over $2.7 MILLION last year, just by charging for your baggage. Now they want to start “renting” out the overhead compartments.

I’m just about ready to shuck it all, and go find a cabin in the mountains and live off the land.

kyle

June 17th, 2010
9:57 am

RBC Bank offers free checking and will continue to do so regardless of regulation changes.

Marko

June 17th, 2010
12:09 pm

Thanks again, Obama. Not only did the rates increase on my credit cards because banks can’t charge the fees they used for deadbeat customers, now I’m going to probably end up with monthly fees for checking. next time, please THINK a little bit before you rush to pass legislation.

Sheri

June 17th, 2010
12:10 pm

Delta Community Credit Union is the BEST!!! Dump WALK ALL OVER YA (Wachovia) and BOFA…..The big banks are out for themselves. Delta Community is there for YOU……

Delta

June 17th, 2010
12:10 pm

@Maynard…if you live on a cash only basis, you can’t fly anyway. You can’t buy a ticket with cash…..

Art

June 17th, 2010
12:16 pm

BOA, Wachovia/Wells Fargo, JPMorgan and Citi can eat my shorts. As a depositor only–not a borrower as I have no debt of any kind–I am disgusted that I am expected to foot the bill for banks that lend to deadbeats. They already ahve use of my minimum balance. If they can’t invest that money and earn something, that’s their fault. As for me, I will be doing mroe and mroe cash transactions. This country has turned socialist.

Mike

June 17th, 2010
12:16 pm

Mary, read the story about Reynolds and see through the liberal media bias…

AGL wants to build a pipeline into a region that has no natural gas service and could have enormous growth when the economy picks up. I disagree with their tactic of charging current users for capital improvements, but it’s incorrect to suggest that this is a pipeline to Reynolds.

(Mercer Reynolds is a big Republican fundraiser. I bet if it were Soros Plantation they’d be talking about how this is going to bring clean natural gas and green energy to the Lake Oconee region.)

BeachBum

June 17th, 2010
12:27 pm

I have an account with Wachovia (Wells Fargo), and an account with a credit union. I have already been contemplating moving everything to the credit union because of interest rates, anyway, so this will just encourage me to make the move soon. I have the minimum balances that any of the banks might charge, but I just don’t feel it is worth the hassle anymore.

Fidel

June 17th, 2010
12:29 pm

@TnGelding: Your line of thinking is precisely why this country is going down the tubes. Why should anyone have to pay for a good or service that others would get for free, simply because the first party has a higher income or larger net worth?

Soon to be former BAC Customer

June 17th, 2010
12:36 pm

First the big airlines, now the big banks. Adios BAC. I hope you get broken up into small pieces by the feds one day soon!

Jeff

June 17th, 2010
12:42 pm

Fidel — well said, my friend. I was just thinking that… TnGelding doesn’t seem to realize that NOBODY should be “required” to pay for stuff that others can’t afford. If you can’t afford, you do without. That’s the way I was raised, and it works amazingly well for my grandparents… they never had a household income over $30 or $40K, yet they lived frugally and invested conservatively. My grandfather retired in about 1984 and they are STILL living and doing well financially 25 years later.

It amazes me how all these “poor” people who are “struggling” in today’s economy can b**ch and moan about big banks, rich people, Republicans, successful families, etc., yet they won’t cut their cable, quit going out to eat every day, won’t stop smoking and drinking, won’t stop buying movies or CDs or fashionable shoes, etc.

I saw some lady in a gas station the other day, complaining about not having a job and how she had to go apply for more medicare benefits… she was there buying a lottery ticket… then she pulled a VERY nice cell phone from her purse.

Methinks our country’s priorities are mighty screwed up… we’ve confused luxury for necessity and we have confused “poor and unlucky” with “makes stupid choices throughout life and then complains about their situation.” We need to fix this soon, folks…..

Dave

June 17th, 2010
12:43 pm

Some Credit Unions charge a $7 monthly fee (mine does not) big deal…BOA, WachOverYa and SunTrustMetoTakeyourMoney all charge you a $5 or more fee on each check if you try to cash a business check written on their account holders account because you don’t have a account with them! I will never have my arm twisted into opening a account with a big monster mega bank….

These banks all consider basic services like cashing a check to be a nuisance and that is not what they are there for…Duh..you are a BANK cashing checks and taking deposits are your main business…If it’s a check on your account you should cash it NO FEES other than the fees you charge your account holder…

I LOVE MY CREDIT UNION!

Tom

June 17th, 2010
12:48 pm

I agree with Fidel and some of the others here. We need to stop demonizing wealthy people. Do you think Bill Gates and Warren Buffet have huge vaults at their homes where the keep all of their money? Of course not! They take their money and invest it, creating jobs, new businesses and stimulating the economy. These people need to be encouraged instead of beat up on. Bill Gates is a college dropout who became one of the richest men in the world because he took the money he made and poured it back into his company (which employs thousands). Let’s not kill the geese that lay golden eggs.

La

June 17th, 2010
1:02 pm

Money talks! The banks will get the idea if people start moving their accounts!

Thomas

June 17th, 2010
1:11 pm

I bank with Fidelity Bank, a local Atlanta only based Community bank. They do and have informed me will continue to offer a Totally Free Checking account, no strings attached. I love them, they have free cookies, free coffee, and a free coin machine counter for customers and non-customers alike. If you are looking for an answer to fees, check them out! http://www.lionbank.com

Maynard

June 17th, 2010
1:19 pm

@Delta – yes I can buy a ticket with cash. I go to a travel agent and pay them with cash!!!! I’ve done it for YEARS….although I refuse to get on an airplane anymore.

Chris

June 17th, 2010
1:19 pm

I bank with Signature Bank; it’s small with 3 locations(Dunwoody, Sandy Springs & Cumming) but they have free checking as well as great rates on MM and CD accounts. The service is also excellent. I think the answer is to stick with small banks like Signature and let the big banks choke on their own fees.

A.S.Mathew

June 17th, 2010
1:26 pm

The trend is reversing. It was from barter-cash-checks-credit cards. Now, most of the people
have learned to live without credit cards, and changing to checks and cash. The heyday of the
mega banks with their high tech software to fleece the defenseless customers through all
the modern legal tricks like; over the credit limit fee, overdraft fee etc created a windfall of profit
for the banking industry. Now, they are starving for money and their investment portfolio in real estate investment is in the wild ocean. Now, people are going back to cash deals, and small
community banks and credit unions. American people have learned a great lesson: big banks are
like rat trap. When the CEOs make 400 times of the salary on an average bank employee, we
can calculate the greedy tricks of the banks without a calculator.

JJ

June 17th, 2010
1:26 pm

@Delta – I too am on a cash only basis. However, I do have a debit card, and I use that if I have the need to fly anywhere. I much prefer to travel by car, not by air, unless I’m going overseas.

Living on a cash only basis is doable, I’ve done it for years. I drive an older car I paid cash for, and just recently purchased a car for my daughter, with cash. I pay most of my bills with cash, or the debit card. My debit card is in my dresser at home, and only comes out about once or twice a month to pay the bills.

I love living debt free, I can sleep at night!!!!! My only debt is my mortgage.

Just Nasty & Mean

June 17th, 2010
1:38 pm

Wait a minute! This doesn’t make ANY sense. Are you saying the banks will start charging for deposits that DO NOT use other services?? How does that makes sense?? It seems banks would want to charge for those that use other services (debit/credit/teller/ATM). I mean, use of those items RAISES their costs. Why would they want to lower fees for those that use them vs. those that do not?

What a crazy world we live in. When the government gets involved, common sense turns upside down.

Crooks Control The Banks

June 17th, 2010
1:52 pm

No matter what President Obama passes or doesn’t pass these greedy crooked banks will try to stay one step ahead of him in getting their pockets fatter. No only them, but have you seen the different fees you are charged on your cell & home phone bills? It’s pathetic to drain the hardworking people of America, but phones are no longer a luxury, they are a necessity in this very evil & violent world. I agree about people spending so much money on lottery, but they are just plain stupid. If & when I buy a ticket, I only buy one for a buck, if it is meant to be, it will be because it only takes one to win. Some people will never learn, no matter how much you make, you can’t overspend & don’t even get me started with the IRS.

skrose

June 17th, 2010
1:56 pm

@jj: Dave Ramsey fan?

money man

June 17th, 2010
2:06 pm

Check out 2Go Checking at First Cherokee State Bank in Marietta, Woodstock or Canton. Or go to http://www.2gochecking.com for a free checking account that pays you interest! Also reimburses ATM fees and provides free online banking and bill pay AND free mobile banking.

OneChris

June 17th, 2010
2:10 pm

I have two checking accounts with major banks and not any fees! They have paid me to open one of the accounts $125 and the other also has my mortgage and two credit cards thus not any checking fees. I have been with one since 1990. I also belong to a local Credit Union so if needed I can switch to them.

JJ

June 17th, 2010
2:18 pm

@skrose – no actually I’m not, never read his books.

I screwed up a good bit in my 20’s with credit cards, and got myself into some serious debt. Then I got married and divorced and was left with all the debt from the marriage. Once I climbed out of those holes I swore I would never charge anything ever again!!!!!

pws

June 17th, 2010
2:44 pm

To Mike:

Why should the rate payers pay for AGL’s expansion? That should be the job of the stockholders to pay for the expansion, because the expansion is being proposed so the stockholders can make more money. When the rate payers have to foot the bill, it’s just free money for the stockholders. It’s their money that should be taking the risk for funding the pipeline, not the rate payers. And this is on top of the 54 million dollar rate hike that AGL has requested of the PSC. AGL needs to get rid of a lot of their high paid upper management and put those salaries into installing the pipeline so they can make more money for their stockholders.

kage

June 17th, 2010
2:51 pm

“Fire” your big bank and go to a smaller community bank or credit union that doesn’t charge these kinds of fees. Some of them will actually call your bank for you and tell them your switching, unless you want the joy of doing that yourself.

Duncan

June 17th, 2010
2:52 pm

I just left Wachovia and joined the credit union.

This is Sad

June 17th, 2010
2:55 pm

My credit union sent out a letter about this last week. Asking its members to call their local reps. and ask them not to vote for this bill.
So it’s not making money for the credit unions. It will be back to the mattress for me.

Change

June 17th, 2010
2:56 pm

I bank w/ several financial institutions. The bigger they are, the worse they are about charging fees. If my bank(s) start charging monthly maintenance on basic checking accounts then, I’ll definitely move all my banking to my credit union (unless they jump on the consumer gouging bandwagon too). Otherwise, i’m going to have to dig a hole in the backyard. At least, I’ll be able to keep what I have (since int. rates are basically non-existent) and not lose money. Unless I forget where I buried it! Umm!

Donna

June 17th, 2010
3:01 pm

I will happily pull my money out of BofA and take it somewhere else.

Kar

June 17th, 2010
3:06 pm

I wonder if there will be regulatory pushback. As with community development credit, banks are supposed to help their community, not just show a profit. If they eliminate a lot of these accounts, they’ll push the working poor or just the poor to check cashing scam artists.

I could see say senior citizens or someone on disability qualifying for free checking. m

A little $$

June 17th, 2010
3:12 pm

I have Wachovia-Wells Fargo and my mortgage is there. All my utilities are debited from that account. Pay the house off in 3 years and I will have SS deposited and that qualifies for free checking.

hoodtechie

June 17th, 2010
3:12 pm

there you go america,you voted for this socialist now live with it.hows that hope and change working out for you

Anne

June 17th, 2010
3:13 pm

Go ahead. I guess I’ll be keeping my money in a credit union or MY MATTRESS!

Long time Atlantan

June 17th, 2010
3:31 pm

My relationship with Wachoiva and predecessor banks spans 40 years. I have never seen an organization lose its morals like Wachovia did after selling to First Union. All the capable Wachovia bankers left. Read about Wachovia now and you read about scandal and money laundering. Nothing is beneath the current group of scoundrels. Changing signs isn’t enough. I am moving to a community bank.

DeltaD

June 17th, 2010
3:45 pm

I’ve been thinking about moving my account to my credit union for some time but haven’t because it’s such a hassle to change info for auto deducts, etc. If my bank eliminates free checking I’ll definatley move my account to the credit union.

Momof4

June 17th, 2010
3:55 pm

I bank with Regions Bank and have just been hit with the fees described. This local bank is no more after they gobbled up bank after bank, they are no better than Wells Fargo, BOA, and SunTrust. I have 5 accounts with Regions and they decided that this month, they are charging for the low activity accounts. I do not bounce checks and they have a good bit of my money in their account. My money has gradually moved over to my credit union.