Last year, the three largest banks in America — JPMorgan Chase, Bank of America, and Wells Fargo — collectively made a whopping $6 billion in customer fees. That’s right; customers are losing billions of dollars to the institutions they entrust to protect their money.
How could this be happening? The problem is often a lack of transparency. Many customers simply aren’t aware of the fees their bank may charge because the information is hidden in dozens of pages of fine print.
For those who may be unknowingly contributing to the big banks’ billions in profits, it’s time to get wise. Here are some of the most common bank fees that consumers don’t realize they’re paying, and how to avoid them.
1. Checking Account Fees
With every passing year, fewer and fewer banks offer fee-free checking. According to Bankrate, less than 37 percent of banks provide free monthly checking with no strings attached. Many banks require up to $1,000 minimum monthly deposit to avoid checking account fees, and the most common monthly charge is $12 per month if you don’t meet the minimum. That’s potentially $144 per year just to have a checking account.
2. Savings Account Fees
Similar to checking accounts, your average savings account is likely charging you an annual fee on top of any fees for not maintaining the monthly minimum. In some cases, banks also charge for a lack of activity in your account. For example, you could get hit with a $5 fee for not making at least one money transfer or deposit into your savings account per month.
3. Overdraft Fees
On average, banks charge $33.07 every time members overdraft, which is how U.S. banks raked in 32.5 billion in overdraft revenue last year. Before the Overdraft Protection Law was passed in 2010, most banks automatically enrolled customers in overdraft coverage and charged a fee every time a customer overdrafts. Now, customers must opt-in to such programs. However, according to a Pew Charitable Trust Survey, 52% of consumers who were hit with one of these fees don’t recall enrolling in overdraft “protection”.
So how can you avoid all these unnecessarily costly fees? Knowing is half the battle, and unfortunately, banks are putting the burden on their customers. Here’s what you can do to make sure you’re in the know and how to avoid these fees going forward:
- Read the fine print. Understand what type of account you have and know the fee structure of your bank account.
- Confirm if you if you’ve been enrolled in optional features that come with costs such as overdraft protection.
- If you discover you’re being charged any of the above fees, consider moving your deposits to a bank account that has no monthly minimums or fees.
At Chime we believe a bank account should make it easier, not harder, to avoid fees, save money, and get ahead. That means no unnecessary fees buried in fine print.