Free Checking May Become a Luxury of the Past

Due to recent changes in debit and credit card fees from the Dodd-Frank bill and the CARD Act respectively, banks are looking to replace traditional sources of fee income. Some banks and credit unions are beginning to charge for checking accounts that, in recent years, were provided to customers for free.

According to recent reports from the Wall Street Journal and New Jersey’s Star-Ledger, Bank of America will begin testing $6 a month fees and J.P. Morgan Chase and Wells Fargo will begin phasing out free checking in New Jersey.

While these fees may keep banks out of the red, a recent survey by BAI & Finacle Index of Bank Sentiment suggests that consumers are not ready for this change. Some of the key findings from the survey are below:

• 85 percent of consumers surveyed do not expect to pay fees for a checking account.
• 44 percent of respondents state that fees charged by banks are reasonable but 42 percent remain neutral about the fairness of fees.
• Only 45 percent of respondents say they are saving money for the future, which is down 6 percent from the February 2010 index.
• They still don’t trust the financial industry as a whole. About 37 percent of respondents indicate they see banks as trustworthy; this is up from 33 percent six months ago but remains a low number.
• They’re trying to reduce their debt. 55 percent of respondents to the most-recent index say they intend to pay off some or all of their credit cards.

Detailed information on the survey is available here.

What are your thoughts on implementing fees for checking accounts? Let us know in the comments section below.

Written by Staff