Bank Fees Go Up Again; Credit Unions Remain Steady

American consumers can’t seem to catch a break. It seems every time we look around, prices are going up. Bank fees are no different.

MoneyRates.com recently found that banking costs nationwide have gone up in almost every category since the end of 2011. The organization’s semiannual Bank Fees Survey found that charges and service fees have steadily increased, including overdraft fees and fees for consumers who fall below monthly minimums.

Overall, the trend is for banking to become increasingly expensive, the personal finance website reported.

Looking at more than 100 banks, including 50 of the largest in the United States by deposit amount, the group found “a worsening fee environment for consumers.”

Bank Fee Stats

• Monthly service fees – On average, consumers now pay $12.08, which is up from $11.28. At larger banks, monthly fees averaged $13.88. Monthly fees at smaller banks were about $4 a month cheaper.
• Minimum balance for fee waiver – Consumers, on average, need to keep $4,446.57 in an account or they will get slammed with fees. That’s up from $3,590.83 in 2011.
• Overdraft fees – Fees jumped from an average of $29.23 per overdraft to $29.83.
• ATM fees – Across the board, ATM fees have gone up for using out-of-network machines.

All of this is in sharp contrast to what’s going on in credit unions nationwide. Bankrate.com recently reported that 72 percent of credit unions still offer free checking accounts or free accounts with minimum balances. Even though that’s down 4 percent from last year’s study, it’s still a far cry from what traditional banks offer.

Market analysts say that while credit unions are missing out on fees, it puts them at an advantage over traditional banks. Consumers are switching. In the past year, the number of credit union checking accounts grew by nearly 5 percent because consumers abandoned the big banks in favor of credit unions.

But, remember just because a credit union doesn’t charge monthly maintenance fees, overdraft fees and out-of-network ATM fees still apply.Whether you’re planning to switch to a credit union or stick with a traditional bank, there are ways to avoid fees:

• Choose a small, hometown bank — Lower bank fees are available in the hometown banks. Nearly 46 percent of smaller banks offer checking accounts with no fees, according to MoneyRates.com.
• Try an online bank – Don’t be afraid to bank on the Internet. Many popular online traditional banks offer a variety of services with no fees.
• Don’t overdraft your account – Whether you are with a small bank, big bank or a credit union, you’re going to get slammed with fees if you overdraft. Some charge $30 or more per overdraft.
• Don’t stray from your ATM – It might be tempting to withdraw some fast cash from an ATM that doesn’t belong to your bank or credit union, but don’t. Consumers typically get hit twice: the first fee is from the bank you are removing the money from and the second is from your own bank. In total, you could wind up pay $10 in fees just to get $20 in cash.

Richard Barrington, the senior financial analyst for MoneyRates.com, advised consumers to review all their options.

“Consumers can still find good deals on checking accounts,” says Barrington. “But it helps to know where to look. Most importantly of all, though, consumers have to make the effort to shop around.”