How to Avoid Escalating Bank Fees

NEW YORK ( -- The banking news over the past days has been very unpleasant for consumers. Fees are rising at a number of major banks.

Bank of America ( BAC) made headlines when it announced it would charge $5 per month on debit card use beginning next year, and the nation's largest bank in terms of assets was not the first bank to assess this charge. Wells Fargo ( WFC) and Chase ( JPM) are testing a monthly debit card fee in selected states, and SunTrust ( STI) and Regions ( RF) are already charging a fee to many of their customers. Other banks could follow.
Bank of America made headlines when it announced it would charge $5 per month on debit card use, but it's just one bank among many adding fees.

Around the same time as the Bank of America announcement, Citibank ( C) began notifying customers it is increasing the fees on its checking accounts.

What should consumers do to avoid these escalating bank fees?

Become informed consumers
Bank customers need to find out what fees will be charged to their specific account. Since banks have to send information on new charges, be sure to read the notices you get. If those notices are too hard to understand, call your bank and ask a worker to make the changes (and charges) clear.

After fully understanding them, ask what you can do to avoid them. It may be that the charges could be waived if you carry a higher minimum balance, expand your banking relationship by opening up an additional account, do some online banking or limit the number of transactions.

Make some personal decisions
When it comes to a monthly debit card fee, you need to decide if it's really worth having a debit card for that monthly cost. If you are a Bank of America customer, is it worth $60 per year to have a debit card? Perhaps you should switch to using cash, checks or a credit card. But you may also be disciplined enough to use a credit card -- not only in limiting what you buy but also paying off the entire balance on time each month so you don't incur steep finance charges.

Shop around for alternatives
If you decide that these new charges are too much to pay, know there are plenty of financial institutions that don't charge a monthly fee for a checking account or debit card use. Now may be the time for you to consider a community bank, credit union or an online bank.

But be sure to investigate the restrictions and fees of each alternative institution you consider. Be sure to take your own spending habits and personal needs into account. It could be that the smaller bank doesn't have ATMs where you most frequently work and shop, and your use of "outside" ATM machines could cost you as much as your current bank's new fees. The responsibility is on the consumer to discover the fees you could be assessed at a new financial institution.

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Bill Hardekopf is chief executive of, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."

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