Banks increase fees to get some more fast cash


Overdraft using debit? Expect to owe some fast cash in bank fees. Image from Wikimedia Commons.

Bank fees are never fun to deal with, but it is ingrained in banking as it is a huge source of fast cash for banks and credit unions. In fact, the pay day that banks get from fees is one of the largest sources of revenue the banking industry has. As the rules for fees on credit cards and other things get more complicated, the fees are going up. There are a few things a person should always watch out for.

Bank fees going up

As new federal regulations come out which limit the amount and the way in which customers can be charged for account services. The major banks are all raising fees, according to CNN. The new laws governing banking and credit cards in the CARD Act place limits on things like overdraft fees. So banks are creating new fees or raising rates on others to get a little more of a pay day where they can. For instance, Bank of America is raising the minimum account balance. If a customer dips below the minimum balance, the bank assesses a monthly fee for doing so.

How overdraft works

Banks previously did not have to inform a customer of being enrolled in overdraft protection. Protection programs can be very costly. For instance, some banks allow account linking and transfers as overdraft protection. A person can transfer emergency money to savings to cover checking. Each transfer will cost you $10 if you bank with Wells Fargo. Then again, that is pretty cheap for a cash advance. Citibank will charge some customers up to $30 a month just for having a checking account with them. A person could wind up needing a payday loan for not spending any money.

Nature of the beast

Banks assess fees for certain things, like going into overdraft. Sticking to the straight and narrow will pay off. The further a person stays from these fees, the less will be paid to the bank.