Bank fee Whac-a-Mole: New charges hit accounts

By Blake Ellis, staff reporterSeptember 24, 2010: 6:10 AM ET


NEW YORK (CNNMoney.com) -- Bank fees: They're like a game of Whac-a-Mole. The minute one set is banned, a whole new set pops up.
In August, the Card Act banned a variety of fees -- including certain overdraft and excessive late charges. But one month later, banks are increasing existing fees and finding creative new ways to charge customers more for credit cards, so-called "free" checking accounts and banking services.
Already this year cash-advance fees and balance transfer fees have risen to 4%, up from 3% in July last year, according to a study conducted by the Pew Health Group's Safe Credit Cards Project.
"It's like you've got a sinking boat, where you plug one hole and another one springs up," said Curtis Arnold, founder of CreditRatings.com. "You can shut down one egregious fee, but that doesn't mean other fees aren't just going to start popping up elsewhere."
Here's a bank-by-bank look of what to expect.
Bank of America: Just last week, Bank of America said it plans to raise minimum balance requirements over the next 12 months and charge a monthly account fee for customers who can't maintain those balances.
Customers enrolled in the lender's new eBanking checking account will be charged $8.95 per month if they opt to receive paper statements and visit tellers instead of banking online. Since the launch of eBanking in August, nearly half of all new checking accounts fall into this category.
Earlier this year, annual fees ranging from $29 to $99 were applied to a variety of Bank of America credit card accounts.
Previously, these fees already existed for Wells Fargo customers but were only applied to a very small number of Wachovia customers.
"This is not unusual in the industry and our competitors have been charging similar such fees for some time," an HSBC spokesman said. "The change aligns us with our competitors."
Other banks let customers link their savings and checking accounts as an alternative option for overdraft protection. But HSBC doesn't, meaning customers will either pay a fee to open a line of credit (if they have good enough credit to qualify), pay a fee for overdrafting their account or get their card declined.
Monthly maintenance fees were previously as low as $3, depending on the account.
The point-forfeiture fee already existed on other cards, so the bank said it wanted to be "consistent and have it across cards."
Because of how competitive the already cutthroat industry has become, banks have to be careful how far they go -- or they risk losing desperately-needed customers.
"They have to be really careful about rolling anything new out in this environment," said Peter Garucci, a spokesman for the American Banking Association. "They've always competed for the same number of wallets, but if the number of wallets is smaller because of the down economy and new rules, the competition is going to increase and the last thing they're going to want to do is make their customers mad."
Consumers should take advantage of this increased competition to negotiate fees with their banks.