In the wake of Bank of America announcing $5 monthly fees for using debit cards many consumers are searching for new options. BoA is not alone, many big banks are looking for new ways to increase revenue after Federal regulations capped the amount banks can charge merchants. But consumer backlash might force banks to think differently about where they get their fees.
If you are one of the many looking to change there are many options available. First make a list of all the features you use at your current bank, including mobile access and internet banking. Also consider convenience. How far are the bank’s ATM and branches? Here are 5 alternatives to banks that charge pesky debit fees.
1. Local Banks and Credit Unions
Most smaller banks and credit unions don’t charge debit card fees or fees if you dip below $25 or $50 in your checking account. Many small banks offer a level of personalized service big banks simply can’t compete with. Many credit unions and local banks are taking advantage of the new consumer upheaval by offering competitive loan and mortgage rates. Check out FindaBetterBank.com, Bankrate.com and FindaCreditUnion.com.
Leaving big banks for small ones has even spurred a movement. November 5th has been declared “Bank Transfer Day.” Small business owners and consumers are urged to send a message to big banks who many feel are making sneaky fees a habit.
2. Charles Schwab Bank
Non-traditional banks also offer great incentives for those looking to make the switch. Charles Schwab Bank, an internet bank, offers customers free debit cards and checking accounts with interest. Plus, Charles Schwab Bank reimburses ATM fees charged by other banks nationwide.
What makes Charles Schwab Bank particularly enticing over other internet banks is their Schwab Bank High Yield Investor Checking service, which is linked to a free brokerage account and doesn’t require a minimum balance (or monthly fee). Calls to customer service are also free. Plus, Schwab’s checking customers can deposit physical checks by mail using prepaid envelopes, or by scanning checks using their smart mobile app.
3. Ally Bank
Ally Bank, similar to Charles Schwab, is another internet bank offering big incentives to new customers. Ally Bank requires no minimum balance and does not charge maintenance fees. They also boast unlimited check writing, no ATM fees, and smart app check deposit. Plus, with Ally’s Interest Checking Account customers are enrolled in Ally Perks. The program gives customers money back on certain purchases.
Not everyone is comfortable with small or non-traditional banks. There are some larger banks that don’t charge debit card fees. Some large banks can still be the right choice depending on how you bank.
Chase has received praise from consumers advocates after the bank decided to drop $3 debit card fees it had been testing in parts of Wisconsin and Georgia. Chase offers several free options, such as Chase Plus Checking, which requires a $25 minimum balance but does not charge any monthly service fees.
However, other free Chase accounts may come with a catch. Chase’s basic Free Checking account, for example, requires customers to maintain a $1,500 balance. Customers can also use their direct deposit once a month to keep the monthly fees at bay, but the checks must come from a company payroll or the government.
Citibank’s Basic Banking Account does not charge fees if customers maintain a $1,500 balance, or if they make one direct deposit and one automatic online payment each month. Otherwise customers are charged a monthly $10 fee. Mid-level account holders face even steeper fees. Starting this December, some customers will be charged $20 a month if they fail to maintain a minimum balance of $15,000 in their combined accounts.
It’s important to study your habits before switching to a new bank. Closing accounts can take up to 90 days and can cost you anywhere between $25-50 per account. Also make sure to ask banks about any sneaky fees. Incentives aren’t truly incentives if they’ll cost you down the line.