Why yes, your bank fees are going up ... and there's more to come

Growing up, I always had the sense that a bank was where you'd go if you wanted to make money, not lose it. After all, I remember watching Mary Poppins on TV, and Mr. Banks' song, "Fidelity Fiduciary Bank," where he told his son in song: "If you invest your tuppence wisely in the bank, safe and sound, soon that tuppence, safely invested in the bank, will compound."

Granted, you can still make money at your neighborhood bank, of course. But you can lose a lot of money, too. Even in these recessionary times, and actually because of these recessionary times, bank fees are going up and getting more punitive toward consumers.
So in case you're wondering what may be in store at your bank, or already is happening, here's what I've picked up lately (some of these bullet points were mentioned in USA Today, although I have added to that information.)
  • If you have a MyAccess checking account with Bank of America, your maintenance fee, as of June 5, went up from $5.95 to $8.95. And if you have an account that's overdrawn for more than five days, you'll be charged a new fee of $35. That's the same price as its overdraft fee, and it's worth noting, that some people have had luck getting an overdraft fee lowered from $35 to $10 if you're overdrawn by less than $5.
  • If you have SunTrust, your fee for stop payments and insufficient funds went up, albeit not much, from $35 to $36. (Your very first overdraft fee is $25. Then, as the expression goes, they mean business.)
  • Wachovia, now part of Wells Fargo, has made it more expensive for some customers to transfer funds to cover overdrafts.
Jean Chatsky, one of America's favorite financial gurus, recently sounded the alarm on Wowowwow.com, that she believes a lot of bank fees that fell out of favor may soon fall back in favor. She feels that we may soon start seeing minimum balance fees in our checking accounts, teller fees (where you're charged to talk to someone at the counter in the bank), telephone banking fees and even fees on seniors and children, two groups whom often get free accounts.

At first, I thought Ms. Chatsky was being kind of alarmist -- until I read about Mary Gorman. She was profiled by Channel 7 WSPA-TV, which covers the news in parts of South Carolina. Ms. Gorman lost her son, Brian Foster, 48, to a terminal illness last March, and when she tried to close his checking account with Bank of America, it obliged and gave a farewell gift -- a $100 legal fee for closing the account.

Ms. Gorman didn't think that was fair. Her son didn't have a lot of money, and it seemed like a rip-off to charge her dead son $100, simply to close out the account. Bank of America's spokesperson said in a statement to Channel 7, "The customer agrees to pay our fees and expenses for research and copying of documents and all other expenses, including administrative expenses, that we incur in responding to any legal process related to a customer's account."

After Channel 7 got involved, Bank of America, as a "courtesy," gave Ms. Gorman a check for $100. How big of them.

It's that sort of tale that makes me think Ms. Chatsky's hunch about more ominous bank fees being in store for us is likely spot-on, especially if the recession continues and banks feel the grip of the economy squeezing them even more.

All of that said, there is one sure-fire way to avoid these bank fees, and you all know what I'm going to say: balance your checkbook.

Obviously, that's harder to do than you'd think. You stand at the grocery and write a check instead of swipe your plastic, and people will glare at you. Slow things down even more by writing in the registry, and you're going to really get glared at. There was even some TV commercial for a debit card, now that I think about it, that used to make fun of people who do that. We've actually made it so that it's almost socially unacceptable to keep track of your finances -- at least if it's done in a way that inconveniences other shoppers for a few seconds.

And with people being shorter on cash than they used to be, it can simply be harder to manage your money. So I'm sympathetic to anyone who gets clobbered by overdraft fees. It's happened to me more times in the past than I care to think about.

If you want fewer bank fees in your future, consider doing the following. This won't help with problems like rogue legal fees and higher stop payments, but it should at least help keep the overdraft fees at bay:

Keep careful track of your money.Sure, this is obvious, but check your bank account at least once a day, and if you're a habitual overdraft-aholic, two or three times isn't a bad idea.

Understand how your bank works. For instance, deposits usually take longer to clear than checks and certainly they go through faster than checks. Debit card charges can be simply weird -- a gas charge might show up as $1 on a given day, letting you think (if you aren't paying attention) that you have more in your account than you do. That $1 is really just a placeholder, however. The actual amount of $41.58 that you filled up hasn't actually made its way through to your bank account yet. It's not knowing little things like that than can make it very easy to go into overdraft.

Get to know your banker. (Granted, if they start charging you to get to know your tellers, this advice all goes out the window.) If you only use the phone and ATM and never drop by and say hello, why should anyone help you out when you do get hammered with bank fees? You're a stranger to them. True, they won't always help you if they do know you, but if you go into overdraft by 79 cents, and you're lodged a $37.50 fee, and you complain, they might let you off the hook, which is what happened to me earlier this year, in January, I think. Now, my brother-in-law actually has taken in plates of cookies to his bank tellers, in hopes of karma coming back to him during his banking woes, but I think there's a line you cross where you forsake all dignity. I like to just say hello and maybe chat about the weather.

Link your checking account to your savings or bank's credit card for overdrafts. It won't prevent you from going into overdraft or from getting hit with some bank fees, but the fees are going to be smaller than the typical overdraft charges.

Always keep a financial cushion. Again, in these times, for a lot of people that's easier said than done. But even if that cushion is an old cigar box in your closet with $50 in it, if you're constantly monitoring your bank account and you can see that you're in danger of going into overdraft, chances are, you can get some funds from your cash stash and into your account before there are problems.

Geoff Williams is a freelance journalist who recently wrote an article about credit card practices in Consumer Reports' special newsstand issue, Rebuild Your Finances. He is also the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
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