Here’s a good, newsy personal-finance story. The Journal reports that banks are turning the screws on their customers, pushing those nasty and often semi-hidden fees on checking accounts to record highs. Their customers are already bailing them out via their taxes, so why not hit them up again?
Last week, Citigroup Inc.’s Citibank started charging some customers a new $10 “overdraft protection transfer fee” to transfer money from a savings account or line of credit to cover a checking-account shortfall. Citibank had already raised foreign-exchange transaction fees on its debit cards and added minimum opening deposit requirements for its checking accounts. Over the past year, J.P. Morgan Chase & Co.’s Chase, Bank of America Corp., and Wells Fargo & Co. have boosted the fees they charge noncustomers who use their automated teller machines to as much as $3 per transaction…
Consumers are likely to see the most pain from bounced-check and overdraft fees. “By the end of 2009, you will start to see fairly substantial increases in overdraft fees” for the big banks, potentially to as high as $40 per occurrence from a current range of $32 to $35, says Mike Moebs, chief executive of Moebs $ervices Inc., an economic research firm in Chicago.
Such fees are key contributors to banks’ bottom lines. About 90% of banks’ consumer-fee income comes from overdraft and insufficient-funds charges, which are expected to increase to $42 billion this year from $20.7 billion in 1999, says Mr. Moebs.
And I’m betting there are going to be a lot more bounced checks in the next couple of years. Just another thing for already-hammered consumers to worry about.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.