Almost everyone young and old in America has some type of checking account with a big name bank. Historically, banks have offered "free checking" to entice customers to open other services with them, such as buying a mortgage. But in the wake of the recent financial meltdown, caused by these very same big banks, changes are afoot that are helping consumers avoid getting in the same mess again. Banks used to make their profits by lending money to anyone who asked, including people who were in over their heads and couldn't make the payments. As a result, people defaulted on their loans leading to foreclosures and unpaid credit card bills. As the economy started to collapse, unemployment increased, which meant more people couldn't pay their bills. Congress then issued the CARD Act, which offered consumers some protection from the predatory actions of banks. The end result is that banks were not making as much profit as they are used to, which of course upsets the fat cats at the top. So banks now need to find a legal way to nickel and dime their customers to get their profits back to where they were.
What is one way they plan on doing this? By eliminating the "free checking account" that we have become accustomed to. As is usual with banks, they are not just coming out and saying that they are getting rid of free checking accounts. They are spinning it by promoting "new and exciting" changes for their customers. Also, many of the changes that will hurt customers are found in those mailings from the banks with fine print that no one reads. So the first time most people will find out about these charges will be on their bill. There are ridiculous charges such as a fee for not having enough money in the account, increased ATM fees, and even a fee to talk to a bank teller! There are, however, ways to get around these fees and bank rather painlessly, as long as we are aware of what our accounts do and do not offer:
Everything is negotiable: If a bank tells you that there is now a monthly maintenance fee with your account, find a way to get around it. Many banks will waive the fee if you sign up for direct deposit of your paycheck, for example. Also, they will be more likely to change things if you talk with a branch manager or official. If negotiating is getting nowhere, tell them you will take your business elsewhere. And if they still don't budge, close the account and go elsewhere. There are tons of options for banks out there, and if the bank you have stuck with for years doesn't think it's important to keep you as a customer, then find somewhere that does.
Watch the ATM fees: The fees you can get for withdrawing your own money are getting borderline ridiculous nowadays. You're not always going to have an ATM for your dedicated bank where you are, no matter how big the bank is. This is inconvenient as it is. But if you use another banks ATM, not only will that bank slap you with a fee, but so will your own! These $3 or $4 fees can really add up if you go to the ATM a few times a month. The first way around that is to take out a large enough amount of money to even justify getting hit with a fee. But more importantly, if you do not like paying ATM fees, you can either go to your own banks ATM, or sign up with an account that doesn't charge ATM fees. There are indeed accounts like this if you look around.
Consider an online bank: Many people stay with their big bank because that's where they first opened up their account or it's where their parents do their banking. This is no reason to stay with a bank, especially if they treat their customers badly by inconveniencing them or slapping ridiculous fees. A great alternative would be online banks. They don't have the high overhead needed to maintain hundreds of branches around the world, so they can pass on some of the savings to the customer. Some online banks will refund ATM fees no matter how much they are. They also almost always have better customer service than the big banks. Some people feel wary about not having a physical bank to go to for deposits. This is hardly a problem nowadays because we can do most everything online or over the phone. So if your current bank is treating you badly, an online bank is almost always a good option.