Study shows bank fees rising, but avoidable: Monthly service fees for noninterest checking are down

Oct 02, 2009 (The Tribune - McClatchy-Tribune Information Services via COMTEX) -- RATE | Quote | Chart | News | PowerRating -- Poor financial habits are proving more expensive than ever for bank customers.

A study released Wednesday by Bankrate.com shows the costs of checking accounts have risen again this year to an all-time high. It examines the average fees associated with using and maintaining an interest-bearing account, including bounced check fees, ATM surcharges and monthly service fees.

Among the findings, ATM surcharges rose 12.6 percent from last year to an average of $2.22 per transaction. Banks increasing the fee outnumbered those reducing the fee by a more than seven-to-one ratio, according to Bankrate.com, which provides free rate information to consumers.

With interest-bearing accounts, monthly service fees hit a new high with an average of $12.55, up nearly 5 percent from last year. However, monthly service fees for noninterest accounts hit a new low with an average of $1.77. Also, 76 percent of noninterest accounts now qualify as no fee, no minimum balance accounts, up from 73 percent last year.

"Fees continue to go up, and you're finding them at every turn, however, the fees remain avoidable," said Greg McBride, Bankrate.com's senior financial analyst. "That requires having the right habits and having the right account that is a fit for our financial lifestyles."

Switching to a free checking account, an easy process, will eliminate any monthly service charges, he said.

"With ATM fees, limit your withdrawals to your own bank's ATM," McBride said. "A lot of smaller community banks and credit unions participate in free ATM networks, and you can get cash back when you use your debit card, and that's tantamount to a free withdrawal."

The survey also found bounced check fees hitting a record high of $29.58, and tiered overdraft fee structures that further escalate fees. Last week, Bank of America, JP Morgan Chase and Wells Fargo announced plans to scale back fees and ease rules for customers who overdraw their checking accounts.

Also Wednesday, the American Bankers Association released a survey saying 70 percent of consumers spend $3 or less in monthly bank fees for services such as checking account maintenance and ATM access, while 56 percent pay nothing, up from 52 percent last year.

"Bank customers today are getting one of the best deals around -- checking and savings accounts for minimal or zero cost," Nessa Feddis, association vice president and retail banking expert, said in a statement.

The association's survey is a "testament to the fact that the fees are avoidable," McBride said.

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