Aug 4, 2008 7:50 pm US/Eastern
Federal Reserve Could Crack Down On Bank Fees
PITTSBURGH (KDKA) ―
ATM fees, bounced check fees, service fees. Bank fees are at an all time high. If you aren't careful, it could cost hundreds of extra dollars each year.
Not only are bank fees rising, but, at some banks, it's getting harder to avoid those fees. Many customers say they are fed up with paying up.
"All these banks are charging so much money," complained one bank customer. "Sometimes these machines charge $3, $2.50 and I think that is just a rip off".
Paul Stanich of Cleveland, Ohio says there is just no escaping the rising fees.
"Overdrafts, ATM fees, you name it they are increasing the fees. "
Last year, banks collected a record $45.6 billion dollars in overdraft fees alone. Consulting firm, Moeb's Services reports that's up 50 percent from just six years ago.
"I'm not happy about that," said Stanich. "We're kind of powerless unless the government steps in."
The Federal Reserve could soon be stepping in to crack down on bank overdraft practices, proposing rules that would allow customers to deny transactions that would overdraw their accounts. Also under fire, the practice of banks paying the biggest checks first, the smallest checks last. That practice often triggers multiple overdraft charges.
ATM fees are rising too. If you want to use another bank's ATM, it will cost you an average of $3.00 to $3.25. By year's end, Bankrate.com estimates Americans will spend $4.4 billion dollars in ATM fees.
In the midst of all these rising bank fees, there are signs of banks stepping in to give customers a break, at least, if you are a good customer.
PNC is giving customers who keep at least $2,000 in their checking accounts free ATM access worldwide.
National City customers with balances of $10,000 get a return of $1.50 on surcharges.
For now, the best way to protect your money from your bank and its fees is to keep careful track of your balance. If you have paychecks direct deposited, you will have immediate access to your money, and ask your bank for overdraft protection. You can link your checking account to a line of credit, savings account or credit card.
If you don't like your bank's policies, shop around for one that better suits your needs.
The Federal Reserve has proposed rules to combat unfair practices regarding credit cards and overdraft fees.
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