Free Checking Falls to 45% of Customer Accounts

[marmar]

(Bloomberg) Free checking has dropped to about 45 percent of U.S. customer accounts, compared with 65 percent last year, a Bankrate.com study found.

The average monthly fee on non-interest checking accounts is $4.37, compared with $2.49 last year, according to the survey released today. The average balance required to avoid the charge has more than doubled to $585.

“Just because banks are eliminating free checking doesn’t mean you’re going to be stuck paying the fee,” said Greg McBride, senior financial analyst at Bankrate.com, a unit of Bankrate Inc.

Legislation capping debit-card swipe fees charged to merchants and restrictions on overdraft charges are driving banks to stop offering free checking as a way to raise revenue, McBride said. Changes to debit-card swipe fees may cut annual revenue at the biggest banks by $8 billion, data compiled by Bloomberg Government show. .........(more)

The complete piece is at: http://www.bloomberg.com/news/2011-09-26/free-checking-declines-to-45-of-customer-accounts-in-u-s-bankrate-says.html

[spartan61]

1. Suntrust sent me a letter with their new fees.

I had free checking and free debit but now I can only have free checking if I keep a balance of $500 and/or direct deposit. It will cost me $5.00 per month to use my debit card. Maybe I'll become one of those people who writes out a check when I go grocery shopping and there is a long line of irritated people behind me instead of swiping my debit card. I know I should change to USAA bank but I have several direct deposits and bill pay with drafts. It would probably be to my benefit to change but there sure would be a lot of paper work.

[FarCenter]

3. If you have "several direct deposits", isn't it still free checking for you?

[spartan61]

12. My checking will be free,

but I'll be paying $5.00 per month to use my debit card. I feel it would be easier to pay the 5 bucks than to go through all the trouble to change everything (i.e. direct deposits, drafts, etc.) by ging with another bank or credit union.

[Name removed]

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[kestrel91316]

2. Checking is still free for people with lots of money. You just need to stash

thousands in the account and keep the balance up. Once again, the Little People get screwed. All the benefits go to the wealthy.

[Name removed]

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[MADem]

4. Pretty soon, if this persists, people will say to hell with it, and just put all their money on

a debit card...or in the mattress!

[Name removed]

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[customerserviceguy]

5. If you're still banking with the biggies

then you deserve whatever they try to do to you. Credit unions are a good option for many people, and where they're not ready for prime time, there is often a community bank that would love to have your business. I have my main account with one, and there's free checking for me, as I'm 55.

[Name removed]

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[customerserviceguy]

11. You may have to look quite a ways

for a good one, especially if you live in a rural area.

One other alternative is an Internet-only bank, they can accept direct deposits, and refund ATM fees. Without the overhead of buildings they can offer free/cheap banking products longer than dinosaur banks.

In any case, it's a reflection of how very low interest rates are. It was routine in the 1960's and 70's for banks to charge for checking accounts. After interest rates spiked up in 1980-81, they decided that the float on the money was worth way more than eating a few bucks a month in fees. I cannot imagine that interest rates will remain this low for terribly long.

[Name removed]

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