Augusta Economy

More News | Fort Gordon | Plant Vogtle | Savannah River Site | Editor

Bank customers jumping ship over new account fees

Saturday, Oct. 22, 2011 5:53 PM
Last updated Sunday, Oct. 23, 2011 12:35 AM
  • Follow Local Business

When Heather Kellar learned that Wells Fargo was going to start charging her a $3 monthly fee to use her debit card, she closed her account and found another bank.

Back | Next
Heather Kellar, of North Augusta, switched to First Citizens Banks from Wells Fargo because she didn't want to pay the bank's new debit card fee. The new fee would have cost her $3 a month.  ZACH BOYDEN-HOLMES/STAFF
ZACH BOYDEN-HOLMES/STAFF
Heather Kellar, of North Augusta, switched to First Citizens Banks from Wells Fargo because she didn't want to pay the bank's new debit card fee. The new fee would have cost her $3 a month.

“I’ve never had a credit card with an annual fee, so why would I pay $36 a year to use my debit card at someplace other than an ATM?” said the North Augusta resident. “If all the banks do it, I guess I’ll have to. But right now, I don’t have to. People are jumping ship, and then they’re going to realize. The only thing you can talk with is your feet sometimes.”

Throughout the Augusta area, many banking customers are becoming frustrated with fees recently imposed at larger banks, from debit card transaction fees to account maintenance fees. To avoid paying them, some are switching to community banks or credit unions, and these institutions are reaping the benefits.

Georgia Bank & Trust has seen an increase in new checking accounts, said president and CEO Dan Blanton. The bank launched a free checking account with no service charges and free online bill pay one month ago, which has turned out to be a “profitable decision,” he said.

“When something upsets people, such as these fees, they begin to look at services that other banks offer. We’re picking up a nice amount of accounts,” Blanton said.

Only four years old, Savannah River Banking Co. isn’t charging debit card fees because it wants to increase its market share, said CEO Randy Potter.

The strategy is working, and the bank has seen an increase in traffic over the last few weeks, said Aiken market president Joe Lewis. With the standard checking account, customers get free checking if they keep a minimum balance and free services such as access to any ATM worldwide, he said.

F&M Bank in Evans has seen a 10 percent increase in traffic since the beginning of September, said chief financial officer Ed Pope. First Bank of Georgia has also gained new customers by offering free checking with no debit card or ATM fees or balance requirements, said president and CEO Remer Brinson.

New price cap rule

The extra banking fees are the result of the Federal Reserve’s price cap rule that became effective Oct. 1, setting a fixed maximum rate that banks with $10 billion or more in assets can charge retailers and merchants to process debit card transactions. To replace the lost revenue, Bank of America, Wells Fargo, SunTrust and Regions Bank recently announced debit card transaction fees for its customers.

Free checking, in general, seems to be a thing of the past. According to Bankrate’s 2011 Checking Account Survey, only 45 percent of non-interest checking accounts are free, down from 76 percent two years ago. Fees for insufficient funds or overdrafts hit a new high for the 13th consecutive year, and ATM fees rose to their highest level for the seventh consecutive year.

However, banks continue to offer free checking if customers meet certain conditions, such as signing up for direct deposit.

“Banking customers in the Augusta and Richmond County and South Carolina MSA have a lot of choice of who they do business with. So, it’s always wise to shop around and find the right place for you,” said David Oliver, a spokesman for the Georgia Bankers Association.

Kellar switched to First Citizens Bank, which offered her a free, high-yield checking account with no minimum balance requirement or monthly maintenance fee. It allows her to earn an interest rate of 1.25 percent if she has certain banking behaviors, such as using her debit card at least 12 times per month.

It took her a month to change everything over because she and her husband had direct deposit and paid their bills online through their debit card, but it was worth it, she said.

Blanton said that he never expected such significant results, though he’s “perturbed at the beating up of the big banks.”

“I guess timing is everything. We didn’t plan the publicity. No one would have known that you would see such bashing of regional banks for the fee, but we knew...these banks had to do something to replace the revenue that legislature took away from them. That’s when we did our analysis and decided that we wanted to offer a totally free account.”

Switching over

Ted Weatherred, of Augusta, is one of Georgia Bank & Trust’s new customers. He decided to close his account at Wells Fargo when he realized he was being charged a $2 monthly fee to access his account data via Quicken, once a free service.

“I feel certain that more fees were in the works. I had been thinking for some time about switching my business to a more local institution anyway, so I shopped around and found something I was happy with at Georgia Bank & Trust. I’m becoming a bigger fan of local banks and credit unions,” he said.

Credit unions, including Augusta Metro Federal Credit Union, are also benefitting, said Mike Mercer, president and CEO of Georgia Credit Union Affiliates.

“Credit union managers tell us they’ve had people coming in and telling them that they’re upset with the new fees at Bank of America and Wells Fargo, and they’ve had it. They’re especially upset about getting charged for having a debit card,” Mercer said.

Still, many banks are not charging fees, Oliver said. According to a survey by the American Bankers Association, 71 percent of participants did not pay any banking fees during the previous year, he said.

He notes that over the years, bank accounts have not always been free. Online banking used to cost about $10 a month. In the early 2000s, larger financial institutions started offering free online banking, which “put pressure on the rest of the industry to follow suit,” he said.

“As you look at it over a period of time, prices change for a variety of services, and a lot of it depends on the economy, consumer trends, consumer demands and the cost involved with providing particular services,” Oliver said.

Regardless, Joe Ann Guillebeau, of Lincoln County, doesn’t want to pay banking fees. She recently closed her account at SunTrust.

“I got a notice that starting Nov. 1 if you had less than $5,000 in your checking account, they were going to charge you a $14 a month maintenance fee. And if you used your debit card, it was going to be a $5 a month fee. That was going to be over $200 a year in fees. So I went down there and closed both of my accounts that I had and moved them to F&M Bank,” she said.

HOW MUCH DOES YOUR BANK CHARGE FOR A STANDARD PERSONAL CHECKING ACCOUNT?
BANK OR CREDIT UNIONMONTHLY DEBIT CARD FEEMONTHLY SERVICE CHARGEMINIMUM BALANCEOVERDRAFT FEEATM FEE
Augusta Metro Federal Credit Union$0$5-a$500$35-b$1 after five ATM transactions
Bank of America$5*$9$0$35$2 at non-Bank of America ATMs 
CSRA Federal Credit Union$0$2.95-c$0$30Four free ATM transactions, then 75 cents each
F&M Bank$0$8-d$750-$1,500-e$32$0 for all ATMs nationwide
First Bank of Georgia$0$0$0$33$0
First Citizens$0$0$0$35-fBased on what foreign bank charges
Georgia Bank & Trust$0$0$0$33$1.25 to use foreign ATMs-g
Georgia’s Own Credit Union$0$0$0$30$0, based on what foreign bank charges
Queensborough National Bank & Trust$0$0$0$30$0-h
Regions$4$10-i$1,500-j$36$2 at non-Regions ATMs
Savannah River Banking Co.$0$0$0$35Five free transactions-k
Security Federal Bank$0$0$0$33$0-m
SRP Federal Credit Union$0$0$0$2-$32$1 for members using non-SRP ATMs, $2 surcharge for non-members
SunTrust???$5$700-n$25 (first overdraft)$2 each transaction at non-SunTrust ATMs $36 (per additional)
Wells Fargo$3$5-p$0up to $35$2.50 each non-Wells Fargo ATM withdrawal, $2 each non-Wells Fargo ATM balance inquiry

*Bank of America will roll out its $5 debit card fee in 2012.

a-unless student, senior, direct deposit or minimum balance of $500; b-$5 to withdraw from savings; c-if not receiving electronic statements; d-unless certain criteria met; e-depending on account; f-if item is over $3 and overdraws account; g-waived with some accounts; h-up to six transactions free at foreign ATMs; i-can be waived through direct deposit or balance of $1,500; j-unless direct deposit; k-then based on what foreign bank charges; m-use foreign ATM four times free before $1.50 fee; n-unless $500 minimum balance or direct deposit; p-unless direct deposit or $1,500 average balance; q-can be waived through direct deposit or balance of $1,500; r-unless direct deposit; s-at non-Regions ATMs; t-$10 to pay with transfer from savings; u-use foreign ATM four times free before $1.50 fee; v-if balance is $500, then fee varies; w-waived with some accounts; x-$2 surcharge for non-members; y-cap at maximum of three per day; z-unless $500 minimum balance or direct deposit; aa-at non-SunTrust ATMs; bb-$4 to transfer from savings; cc-unless direct deposit or $1,500 average balance; dd-each non-Wells Fargo ATM withdrawal, $2 each non-Wells Fargo ATM balance inquiry

Source: Bank Web sites, local and corporate banking officials

WHAT ELSE CAN YOU DO TO MINIMIZE OR AVOID FEES ALTOGETHER?

DEBIT CARD FEES

• Consumers Union, a nonprofit advocacy group that is concerned about unfair fees, is fighting this one on consumers’ behalf by urging banks to drop the fees.

• Simply ask yourself whether you really need a debit card. If you can live without it, consider dropping it and paying by credit card, cash and checks.

MONTHLY SERVICE FEES

• Pay close attention to all your bank notices and account statements that will disclose any changes.

• Many banks will waive checking account fees if you set up direct deposit.

• Move away from interest-bearing checking accounts. The extra cost is hardly worth it. Interest rates typically are no better than 0.2 percent.

ATM FEES

• Do your homework on what your account allows and whether you might be able to switch to an account that allows free out-of-network withdrawals.

• Avoid using non-network ATMs. Make withdrawals either at your bank’s ATMs or within its network.

OVERDRAFT FEES

• For starters, don’t opt in when your bank asks your permission for overdraft protection, or opt out if you already said yes. Banks can’t charge you for covering a payment unless you opt in, notes Hardekopf, who calls opting in “a horrible idea.”

• Monitor your available account balance online regularly. Signing up for email and text alerts will help. And you can link your checking and savings accounts.

PAPER STATEMENT FEES

• Sign up for online banking and save yourself $36 a year. You can print it out on your own if you like.

Comments (15) Add comment
ADVISORY: Users are solely responsible for opinions they post here and for following agreed-upon rules of civility. Posts and comments do not reflect the views of this site. Posts and comments are automatically checked for inappropriate language, but readers might find some comments offensive or inaccurate. If you believe a comment violates our rules, click the "Flag as offensive" link below the comment.
Taylor B
5
Points
Taylor B 10/22/11 - 06:13 pm
0
0
Free market at work, folks. I

Free market at work, folks. I give these big banks less than a year and the fee will disappear.

bdouglas
4884
Points
bdouglas 10/22/11 - 06:19 pm
0
0
The Feds set a "minimum" rate

The Feds set a "minimum" rate the banks can charge? Either the story is wrong or that just doesn't make sense. Setting a max rate would decrease their income, not a minimum.

DewHickies
0
Points
DewHickies 10/23/11 - 12:06 am
0
0
I personally believe the

I personally believe the future is in online banks. Checks will be considered an inefficient way to pay bills in a lot of cases. Your cell phone will be your wallet and consumers will purchase items with a "wave by" method. Even vending machines are becoming robotic...
I am am all for the goodness of local, hometown banks and CUs. The human touch can not be replaced by a piece of software.
Subscription services, such as the AC fee for accessing my local newspaper is one example of such services. Whoever would have thought people would pay for radio, but the rewards are worth it in most cases.

Traci Westin
3
Points
Traci Westin 10/23/11 - 12:34 am
0
0
You are correct, bdouglas.

You are correct, bdouglas. "Maximum" it is. Thank you.

KSL
126051
Points
KSL 10/23/11 - 12:46 am
0
0
Now, back when the dollar was

Now, back when the dollar was worth more, the banks normally charged a fee based on the number of checks you wrote per month and they charged you for check books printed. Now I am not pleased with the new fees, but they are less than they were some decades ago. And considering inflation, they are way less. This entire ruckus disgusts me. Come on people, remember when we had to pay for the printing of the checks and a service charge based on how many checks you wrote per month? And Heaven forbid it your account was a business one. Tons of fees went away and I don't begrudge them if they are bringing back some to counter the fed regs. After all, the feds caused the banks messes.

mtxbass1
0
Points
mtxbass1 10/23/11 - 04:36 am
0
0
KSL, Times have changed.

KSL,

Times have changed. People rarely use checks anymore because they are a giant hassle to most. We have systems now that can deduct money in the blink of an eye from an account. SHOULDN'T the fees be less than they were decades ago, considering how much technology has advanced and many more customers use credit/debit cards?

Banks are already making a profit on interchange fees. Tacking on another $3-5 is a calculated move by the banks. Bank of America didn't just pull a $5 fee out of thin air you know. Think about this. The average consumer uses a debit card 25 times a month. Congress set the maximum interchange fee 20 cents lower than it previously was. 25x$0.20 = ...$5.00...

Riverman1
82099
Points
Riverman1 10/23/11 - 05:31 am
0
0
Heed the warnings of our

Heed the warnings of our finance expert, Many Arrows. Local banks are in serious trouble even if they deny it. Their financial reports are cutting it very close. The leverage ratio requirement has been changed to nebulous regulations to keep banks from closing. Beware.

Techfan
6461
Points
Techfan 10/23/11 - 06:18 am
0
0
I was wrking in banking

I was wrking in banking (lower levels) when ATM's started to come out. They started putting them in so they didn't have to pay tellers (and a bank teller is not a high paid position).

jamesnewsome
38
Points
jamesnewsome 10/23/11 - 07:01 am
0
0
To KSL: Don't know where

To KSL: Don't know where you've banked, but I haven't had a checking account that had a fee per check or any other charge in over 30 years. The trade-off for free checking is that the bank can use the average daily deposit to invest overnight or in other ways to make money. I'm fine with this as long as checking is free.

If banks want to charge fees for checking then pay interest on the daily balance, and some, as pointed out in the article, do this. If ironic that (my bank) Suntrust will process all the paper checks I can write without a fee, but will charge a fee if I use the debit card. Doesn't make sense when you consider that debits are electronic transactions and processing checks require human processing. You'd think the fee structure would be the other way around.

Additional nonsense from Suntrust is that the $14 monthly account fee will be waived if you have direct deposit. Why? Is the logic that a regular deposit requires a teller to assist? Then they should be consistent charge where tellers are needed and encourage users to go electronic by eliminating fees. Banks should also charge if someone wants a paper statement mailed. Customers should be encouraged to go electronic by incurring no fees. Basically this is where we were until a few months ago.

My bottom line is that I've already open an account at Queensboro, a regional bank with $0 fees. Suntrust has lost a loyal customer for life, and the rest of my family has closed or is in the process of closing their accounts with Suntrust.

It is my belief that this new fee is going to severely backfire on most banks. The last thing any business should want to do is run customers away. It is apparent that customer loyalty means nothing anyone.

dwb3080
15
Points
dwb3080 10/23/11 - 07:13 am
0
0
Really nice story. Please

Really nice story. Please note the list above only has one bank that does not have any small print connected to it. First Banks is a true Free account. I do not pay ATM fees period, no matter which ATM I use. Yes they waive the fees from the other banks as well. Great service to match the great accounts they offer. They have had this account in place and did not start it because of this latest news unlike some local banks.

GaStang22
910
Points
GaStang22 10/23/11 - 08:23 am
0
0
I agree jamesnewsome, I've
Unpublished

I agree jamesnewsome, I've never had an account in my life that charges me a fee per anything either. Checks, cards... etc... I would never sign up for those types of accounts. lol

GaStang22
910
Points
GaStang22 10/23/11 - 08:30 am
0
0
It kills me that wells fargo
Unpublished

It kills me that wells fargo seems to have the need to charge these fees when they are stealing millions from customers already in immoral backwards business practices with overdraft fees. They have been sued before but continue the practice, when will the feds step in???

sgmret
3831
Points
sgmret 10/23/11 - 09:26 am
0
0
Our friends in Congress

Our friends in Congress created this mess.

allhans
23517
Points
allhans 10/23/11 - 10:55 am
0
0
I don't recall when I last

I don't recall when I last paid a service charge or paid for check printing.
I don't like being nickled and dimed to death but $3.00 is not a great deal to pay for the services I am rendered.

I am much more concerned with retirees being hit with an increase in their Medicare premium while Medicare cuts payments for their health
care.

omnomnom
3964
Points
omnomnom 10/23/11 - 11:06 am
0
0
meanwhile, a whole new

meanwhile, a whole new generation worries about being able to retire at all

seenitB4
85077
Points
seenitB4 10/23/11 - 11:17 am
0
0
I don't mind the small $3 fee

I don't mind the small $3 fee for sending the statement...but I will give more business to the Credit Union....don't want all my eggs in 1 basket....as they say.

blakkone
72
Points
blakkone 10/23/11 - 03:25 pm
0
0
the $3 or $5 fees arent that

the $3 or $5 fees arent that big of a deal. Its not the amount but the fact that some of these banks have accepted out tax dollars to be bailed out and then still want more of our money.

I have been a customer at Wells Fargo since it was Wachovia when I was a soph in high school. (im over 30). I remember opening my account at the wachovia that used to be in the now vacant building on the corner of deans bridge and glenn hills drive across from kroger near boby jones exit!

I refuse to give them $3 a month to access MY MONEY that i allow them to loan out. In fact, they should be payng me $3 a month for being a loyal customer for 15+ yrs.

Will
75
Points
Will 10/23/11 - 03:26 pm
0
0
I've gradually begun pulling
Unpublished

I've gradually begun pulling my accounts with these profiteering banks. This is simply a method to make customers overdraw their accounts and get slammed with more horrendous fees. There are still a few financial institutions out there not charging these ridiculous fees. And if they remain that way, they're gonna take all the other's business. First and foremost: keep the customer happy.

Chillen
17
Points
Chillen 10/23/11 - 05:44 pm
0
0
The free market works

The free market works beautifully when left to its own devices.

I wouldn't be surprised if the government intervenes and prohibits people from cancelling their accounts - yes, they make rules THAT stupid - all the time.

Government Rules and Regulations are choking the life out of this nation and our economy.

Back to Top

Search Augusta jobs