Here They Go Again: Banks Hike Fees

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Banks have two primary sources of revenue. One source is the spread between interest rates they pay depositors and interest rates they charge for loans or rates banks can earn by investing unloaned dollars. The second source is fees. Since we are in a low interest rate environment, the banks have thinner interest margins available to earn on loans and investments. However, the one thing the banks have more control over is fees.

A study released by Bankrate reveals that banks continue to hike up fees year after year which is a direct fleecing of their customers; expecially those customers that live paycheck to paycheck and have a higher risk of overdraft fees. Many consumers avoid using banks and checks for this reason and choose to pay in cash whenever possible. There are services available that choose to provide assistance to these customers when they need extra short-term cash.

Key Findings of Bank Fee Study
For the 11th straight year, bounced check fees have gone up. Banks are further penalizing more frequent check bouncers with even higher fees. No surprise here, ATM fees have risen more than 10 percent this year. The penalty fees for falling below your minimum balance requirements have risen almost 5 percent.

Congress is taking action to pressure banks to provide more options to customers to avoid bounced check fees. Bank of America, Wells Fargo and Chase have announced policy changes even despite this change, many consumers continue to depend on fixed cost cash advances to avoid the unexpected fees and all the embarassing moments that comes along with a bounced checks.

Here is a run down of what is in store for you when you bounce a check. First, you receive a notice in the mail or an email with the hefty charge showing up. Then, you receive the notice in the mail or a phone call from whoever you wrote the check to, asking you to make good on the check. Sometimes you have to go to the merchant in person to redeem the check with cash and to pay the fee. It is generally tough to explain your situation to just one person behind the counter and by the time you finally get the check back in your hand, everyone else who was standing in line waiting for service is well aware that you bounced that check. Sometimes, you lose your check writing privileges altogether at that merchant if this has happened several times in the past.

About the Author:
Nathan Randall, editor, DailyDollar Newsletter provides free daily advice on money matters plus coupons and discount codes. FYI...you can now access the DailyDollar Newsletter via iTunes podcast, YouTube video, and on Facebook and Twitter too.



Article Originally Published On: http://www.articlesnatch.com


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