MEMPHIS, Tenn. — Even after tougher regulations, a pair of surveys from WalletHub reveal consumers are still getting socked with serious bank fees.
“A typical checking account has anywhere from 25 to 50 fees attached to it and unfortunately, consumers aren’t always told about them up front,” says spokesperson Jill Gonzalez.
WalletHub compiled a best and worst list, looking at fees and transparency, based on customers’ banking habits.
You can find out how exactly much an account will cost you, depending on how you use it.
Checking Account Cost Comparison List
Gonzalez says unfortunately, the less money you have, the more expensive a checking account is.
“The average cash strapped consumer spends $500 annually on fees, things like overdraft fees, minimum balance or direct deposit thresholds,” she says.
Sherita Goodman is a Financial Management Counselor with Operation Hope.
She’s based at First Tennessee in Downtown Memphis and teaches classes on credit and money management.
“In my sessions, I spend a lot of time educating them on some of the fees that occur in the bank and try to empower them to ask the questions about the fees before you open an account,” Goodman says.
Goodman says financial education is critical for the Memphis community.
That’s because many people don’t even have checking accounts.
Those consumers often use places like check cashing stores.
So, Goodman says while some folks might avoid opening an account at a traditional, financial institution because of fees, relying on the alternative is much worse.
“I definitely tell them to stay away from that because sometimes there are fees you don’t think about.”
How can you avoid fees?
Determine how you’ll use the account-Ask yourself whether you’ll need access to things like paper statements or checks, and whether you’ll use direct deposit. Using features like direct deposit can help avoid fees.
Opt out of overdraft coverage-Banks are required to provide this option now. If you opt out, you can’t overdraw the account. If you opt in, you can link another account to pull the funds from, however in some cases you’ll still incur fees.
Check into online banks-If you’re savvy and don’t need that face to face contact, this is a good option. Most of the accounts come without lots of fees.
Join a credit union-Credit unions typically have much lower fees than banks. They also offer other financial products such as loans, CDs, money market accounts, etc.
Talk to your banker-The best idea is to have a conversation at your bank and ask about all of the fees up front. Whether the bank is large or small, they’ll likely have a product that fits your needs.
Read the fine print-Financial institutions are required to disclose lots of information about fees. However, how easy is it to find and once you find it, do you understand it? Check on company websites and talk to banks about additional information.
