YW Blogcast 49 - Checking Account Fees Set To Conquer The World

It’s getting more expensive to own a checking account these days. Young Wealth wonders if the sudden rash of fees and penalties is a surreptitious last ditch effort by banks to recover from years’ worth of hideously poor decision making in regard to mortgage loans? In this Twilight Zone-esque drama known as the sub-prime mortgage crisis, we’re reluctant to say anything is impossible, but recent data released by Bankrate.com makes us wonder exactly how far the industry can go before citizens rise up in revolt? There are plenty of good mattresses out there that could serve as a cash repository also.

Prime offenders for fee-hiking are, as one might reasonably guess, ATM convenience fees and overdraft “protection,” though we wonder how the lowly consumer manages to differentiate between protection and a gouge. You know, a hard working bank’s gotta make a living somehow.

First up, out-of-network costs for using an ATM. By now, you’ve probably realized that accessing cash on the road is not as simple as inserting your card into any old machine and drawing out a few bucks. Sorry, but no pay means no play. The average fee to use an ATM that isn’t hosted by your local bank was $2.33 this year, up five percent from 2009. Meanwhile, the average overdraft charge for not having enough money in the account to cover a check or withdrawal is over $30! And what used to be all the rage in banking commercials, free checking, is slowly going the way of the brontosaurus, with institutions that offer the service dropping from 76% to 65% over the course of the last twelve months.

Since the bank really doesn’t care if you hold your breath until they change their fee structure, you’re going to need to hit upon another alternative. Save big on ATM fees by using the “cash back” option when you’re shopping. Most grocery stores and other big box retailers offer the service at no cost. Remembering this simple workaround solution could save you a few hundred dollars a year in out-of-network fees. As far as overdrawing your account; the only answer we have to that one is keep a close eye on your balance and simply don’t exceed it. If you’ve ever lost track of your checking account and added up the steady line of thirty dollar charges at the end of the month, you realize that this sort of checkbook balancing scheme can go wrong in a hurry.