If you're a Bank of America customer with a basic checking account, brace yourself for a 34 percent hike in the monthly service charge on your next statement. As of today, Bank of America is charging $12 a month, up from $8.95 per month, for its popular MyAccess account.
Fee Fi Fo Fum
Apparently the $8.95 per month charge wasn't bringing in enough fee revenue for Bank of America to offset the decline in other fee revenue when tougher regulations were put in place. In fact, just yesterday, Bank of America's plan to return $410 million to customers for excessive debit card overcharge fees was approved by the courts. Bank of America is part of a class action lawsuit that also involves other banks; the $410 million is just what it will pay its customers. Other banks in the suit have yet to reach a settlement.
What You Can Do
If the jump from $8.95 to $12 is your final tipping point, you do in fact have some options. Bank of America continues to waive the monthly fee if you make at least one direct deposit a month into the account. But, um, even that bar was just raised. In the past, the direct deposit could be for any amount. The new requirement is that the monthly direct deposit be for at least $250. An average balance of at least $1,500 will also allow you to steer clear of the $12 monthly charge.
If that's not doable, or you've just had enough of the fee frenzy, it may be time to give credit unions a serious look. In Bankrate.com's 2011 study of credit union checking account plans, 76 percent of credit unions offered free checking with no strings attached. Bankrate hasn't yet released its 2011 bank survey, but last year, only 65 percent offered no-strings, free checking. Something tells me that number will be lower this year. Credit unions are more predisposed to offer absolutely free checking because as non-profits they have less incentive, or shall I say, shareholder pressure, to deliver ever-higher earnings.
Adding to a Bad Reputation
Bank of America's fee grab isn't likely to do much to burnish its public image. In American Banker's new 2011 survey of banks with the best and worst reputations among consumers, Bank of America was rated 28th out of the 30 largest banks. Only Capital One Financial and Citibank did worse. A score of 70 is the minimum required to be considered to have an above average reputation. Bank of America's score of 53.4 falls into the "weak/vulnerable" category , as did Citibank's 52.2 score and Capital One Financial's 50.5.
Now that said, no bank can lay claim to having an absolutely fabulous reputation. It's going to take a whole lot more consumer-friendly effort and a few more years of distance from the 2008 financial disaster and bailout before banks have any chance of being held in higher esteem. No bank came close to the score of at least 80 that signifies an "excellent" reputation. But if you're looking for the best of the lot, here are the most reputable banks -- among only the 30 largest -- according to American Banker's survey:
Most Reputable Banks
1. Harris Bank (73.09 score)
2. Zions Bank (70.22)
3. Charles Schwab (69.99)
4. Ally Bank (68.8)
5. BBVA (68.49)
What about the other big boys? Well, Chase ranked 25th with a score of 59.79 and Wells Fargo ranked 26th out of 30 with a score of 57.82. Not exactly a great showing by the old brick and mortar behemoths. In fact, the survey suggests non-traditional banks are getting props from consumers. Charles Schwab, at #3, is a brokerage-based bank, as is E-Trade, which is ranked #8. And in addition to Ally Bank at #5, ING Direct, ranked 7th, giving online banks two spots in the top 10.
Photo courtesy Flickr user Betsssssy
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