Did you hear that?
It was the other shoe falling as Citibank announced some significant fee hikes for its checking accounts. It comes less than a week after Bank of America said it would start charging $5 a month to people who use debit cards.
Unfortunately – there will be far more than just one pair of shoes hitting the floor.
The Citi fee hikes are another punch in the face to people who put their money in the major U.S. banks. This is all fallout from the so-called Durbin Amendment and other aspects of the Dodd-Frank Financial Reform bill of 2010.
Long story short – banks are losing money because of new federal regulations that were allegedly designed to increase competition and benefit consumers. But instead they’ve prompted banks to look for new ways to make up for the money they expect to lose.
Here are the details on Citi’s new fees…
Beginning in December, you will be charged $20 a month for a mid-level checking account with Citibank if the combined balance of your accounts is less than $15,000. Citibank customer used to be required to have a $6,000 minimum balance.
Everyone in American with $15,000 in your checking account raise your hand! (Hmmm? I don’t see a lot of hands going up out there)
Citi’s EZ Checking package will come with a fee of $15 a month for balances less than $6,000. Plus, Citi will be phasing out these accounts and switching them to other types of accounts like its Basic Banking account.
Customers can actually avoid the $10 monthly fee on Basic Banking accounts by making at least one direct deposit and one automatic payment per month – or by keeping a minimum balance of $1,500.
Citibank may have made a smarter move than Bank of America. Citi did it’s homework and realized that debit card fees would really tick people off.
“We conducted extensive surveys with our customers, and no one wanted to pay to use debit cards,” said Citi’s retail banking chief Stephen Troutner.
While it is possible to avoid the fees Citi is imposing on its checking accounts as well as similar fees at other banks – many customers are simply packing up and moving their money to smaller local banks and credit unions.
That was the call going out from many of the hundreds and hundreds of comments on an article about the new checking account fees featured on CNNMoney.
“I would boycott any bank that plans to continue this pratice. I am already moving my money and mortgage for both my wife and I to a local bank. F BOA, Chase, CITI and on and on. Between the banks and wall street they really f’d up this country big time. ~ jimbo12568″
Another reader said fees like this could be the beginning of the end for big banks.
“There are many banks who do not charge for these services. In the end, banks like CitiBank, and Bank of America will whither and die if they do not cater to their customers. Anyone who continues to bank with these companies, I have no sympathy for you, either quit whining, or find a better bank that is customer friendly.” ~ pfarnsworth
Still others debated whether the Dodd-Frank legislation should be blamed for the fees consumers are dealing with.
“Thank you Frank, Dodd and Durbin for you wonderful finance reform bill and fees on the bank. I’m sure you didn’t realize that in your effort to punish the banking system you have actually punished the people using those banks. How did you think those fees where going to get paid for?” ~ superfudge1
“By banks doing the right thing and accepting that they’d make less profit in this economy, apparently. Too bad they underestimated the greed of the companies they were regulating. Please lay the blame where it belongs, and please stop thinking banking regulations are about “punishing” the banking system.” ~ enfilmigult (in response to superfudge21)
What’s your opinion on the rising fees at major banks?
Who is to blame?
If your bank introduces new fees connected to checking accounts or debit cards – will you work around them or move your money to greener pastures?
Leave a comment and join the conversation. Then…please RETWEET & SHARE using the social media buttons below if you found this article useful or interesting!
Image: graur razvan ionut / FreeDigitalPhotos.net
+Kasey Steinbrinck writes regularly on personal finances and the U.S. economy for Check Advantage. Visit them today and view their most popular checks including a big collection of Dog Checks as well as QuickBooks Checks for businesses.
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{ 2 comments… read them below or add one }
I have a Wachovia account right now but since it is about to be changed to a Wells Fargo account I was wondering if they would be canceling the free checking account? Is Wells Fargo a good bank when it comes to checking and savings account or do they charge a lot of fees?
Here’s what an FAQ page for Wachovia customers has to say about fees.
https://www.wellsfargo.com/wachovia/faqs/wachovia
So just keep an eye on your account and look for mail and email that might inform you that new fees are being introduced.