Time to kiss your free checking account goodbye
Your checking account could be bleeding you dry
by. Martha C. White
Just when you thought banks couldn’t get any stingier, the number of banks offering free checking has fallen below 50%, a drop of around 10 percentage points in only a year. Now, want to hear the bad news?
Depending on your usage habits and how much money you have, the price you pay for that account could be an eyebrow-raising $700-plus.
As of June, roughly 48% of banks offered free checking, according to financial research company Moebs $ervices, compared to just over 58% a year earlier. “The Banks are exiting Free Checking because it is too costly,” says Mike Moebs, CEO and economist of Moebs $ervices. The number of credit unions offering free checking fell by a fraction of a percentage point, but nearly 80% still offer free checking.
Not only is free checking harder to find, but a new survey from personal finance site WalletHub.com finds that the privilege of having an account can run into the hundreds of dollars — and banks make the most off customers who are financially struggling or who travel to or send money to other countries most often.
According to a new analysis of 65 different checking accounts offered by the 25 biggest banks, the average annual cost for a checking account runs for just under 18 bucks — that’s for “old school” customers who don’t bank online, use paper checks, never use another bank’s ATM or overdraw their accounts — to $499 and change for the customer segment WalletHub characterizes as “cash-strapped;” that is, those who overdraw and don’t have direct deposit. The bite is the most serious for these customers who have the M&T Free Checking account; WalletHub says this would cost a person with these usage patterns a whopping $735.continue reading »