News 12 at 6, June 1, 2009
AUGUSTA, Ga.---In a tough economy, some banks are raising checking account fees, especially for overdrafting.
"I've paid $35 on 76 cents before," says Lem Chester.
Overdrafting has left Lem Chester with that terrible feeling for paying a steep price for a small mistake. Now it may create a worse feeling, as some banks are raising those rates.
"Well the bank's gotta make money but...they gouge you a little bit every now and then," says Chester.
Bankrate.com did a study and says nonsufficient fund fees are at an all-time high, averaging about $29 in 2008, which is up about 2.5% from the year before.
SunTrust just raised their overdraft charges on their free checking accounts. After one at $25, the rest will mean a $36 fee. That's up from $35.
In June, Bank of America will charge $35 if an account remains in the red for 5 or more days in a row.
Wachovia has made it more expensive for some customers to transfer money to cover overdrafts.
"Usually it's the customer's fault for not taking care of their business, but they ought to cut you some slack on that $35," says Chester.
There are ways to avoid those high fees. The Federal Reserve Board says people should pay attention to their account balances. That sounds simple, but people don't do it as much these days because of electronic banking.
People also should not forget about automatic bill payments for utilities, insurance, etc.
A checking account can also be linked to a savings or credit card account. That may cost in other fees but may be less in the long run.
Some banks offer alerts when checking account balances reach a certain low. This can help customers realize when they are about to overdraft, or a limit can be set for a debit card to be declined when it reaches the amount.
Banks have different reasons why they are banking on fees to help their bottom lines. Some say it's to offset losses, while others says it's because people have become a riskier investment.
Some banks have made adjustments to help customers, though. SunTrust checking accounts other than the free ones allow for some waived overdraft fees, before the customer is charged $36.
Bank of America will lower the $35 overdraft fee to $10, if the account is overdrawn by a total less than $5 when processing is done that day.
For those who have already been charged the fee, consider asking the bank to waive it. It may work, especially for those who have had a good history.
People who have accrued a lot of fees will find it harder to get them waived, but sometimes the bank will get rid of them if the customer opens up a savings account or another service with the bank.