I’m glad I’m not a Bank of America customer. Apparently BofA is testing yet another new set of fees to boost its sagging revenues, according to the Wall Street Journal.
These fees would include a monthly charge for basic checking accounts, unless you maintain a certain balance, bank online or have a mortgage or other products with the bank.
It’s not necessarily the fees that bother me the most about BofA (although $25 seems a bit ridiculous), it’s the size of the bank. It’s too big. And the bigger the institution, the more impersonal the service and, more importantly, if the bank isn’t doing well, too many people can get caught in the crosshairs.
I remember my first bank account when I was in college. I didn’t have much money and clearly recall paying a monthly fee for a checking account for years until I was able to obtain and maintain a certain balance. I don’t think the fee was over $5 a month, and when you’re poor, it certainly does seem as if everybody is nickel-and-diming you.
Then, sometime in the 1980s, free checking accounts became all the rage. Companies should learn that when you give something away for free, charging for it later will almost certainly result in some major backlash. When BofA tried to institute a $5 monthly fee for using a debit card last year, the outrage was enough to cause the bank to recant. According to J.D. Power and Associates, more people switched from bigger banks to smaller banks last year — mostly because of fees.
A Javelin Strategy & Research report released Feb. 29 surveyed fees on basic checking accounts of 30 financial institutions and found that consumers are paying about 21 percent more for fees today than in 2006. And larger banks generally charge more in fees (about three times more!) than smaller or mid-size banks — an average of $5.88 a month.
Smaller financial institutions that are run well by their CEOs — meaning they appear to put their customer’s financial needs above their own — just seem to be a safer place to put your hard-earned cash. The fact that the big banks had to be bailed out in 2009 was frightening. When you are “too big to fail,” you are probably too big, period.
So, I’ll be sticking my cash with financial institutions that aren’t so big that one or two missteps can cause an economy to collapse. And if fees are involved? If they’re reasonable, I’ll pay them, find a way around them or switch.