It's true that consumers appear to have won a battle against bank fees. Bank of America announced that it will not go through with its intention to charge a monthly fee of $5 for debit card usage. Thanks to great deal of outcry, and people actually moving their money, Bank of America is back-pedaling on its decision to charge for debit card usage. Consumers have seen what they can do, and the big banks are honoring their wishes (at least with regard to debit card fees).
At least for now.
The bank fee war is far from over, though. While it's true that banks still make money off taking the money you deposit (at low yields) and lending it out to others (at higher interest rates), banks have become more and more focused in the last few years on revenue from fees. And, as caps on overdraft fees and debit card transaction fees are introduced, banks look for additional ways to make money off fees. Fees bring in billions of dollars for banks, and they aren't going to stop looking for ways to raise them — no matter how profitable they are.
On The Lookout For More Fees
No, you probably won't see debit usage fees anytime soon. But you might see other attempts to raise revenue from fees. Here are some items to look out for the next time you receive a bank statement or other communication from your bank (you should read everything your bank sends you):
- Hikes to current fees: Be on the look out for increases to existing fees. ATM fees might go up by $1, or you could see a small increase in your monthly checking account fee. For free checking accounts, you might become subject to an activity minimum, or a balance requirement. These small changes don't make as big an impact in the media, but they can affect you.
- New, smaller fees: Perhaps you are going to be (quietly) charged a small fee for paper statements. If yo make transactions via phone, a fee might be added. These new fees are likely to be small and somewhat unnoticeable, but banks are hoping they will add up.
- Credit card changes: Instead of hiking bank fees, some institutions are likely to look for revenue increases from other products, like credit cards. An interest rate increase to your credit card issued by your bank, or perhaps the addition of an annual fee, might be considered in order to help raise more revenue.
- Reduced perks: Sometimes, banks look to boost positive cash flow by cutting back on perks. You might not see an increased fee, but banks are increasingly getting rid of debit card reward programs. Other perks, like free notary services, might also disappear for bank consumers.
- Lower deposit yields: And, of course, in order to boost revenue some banks might decide to reduce the yield they pay on deposits. Interest yields are being cut on savings accounts, money market accounts, HSAs, CDs and interest checking accounts.
In the end, banks are for-profit businesses, looking to make money. You have to be on your toes constantly if you expect to stay ahead, and get the most value for your money.