NEW YORK -- Banks are making it easier for customers to avoid fees on their checking accounts, but they're coming down harder on those who bounce checks.
And, according to a new industry study, some are preparing to raise fees for using the increasingly popular automated teller machines.
The study, by the Bank Rate Monitor, found banks are lowering the minimum balance that customers need in order to qualify for no-fee checking. The average minimum balance for avoiding checking fees dropped by 60 percent to $346 between March and September, according to the survey of 250 banks and thrifts.
But while their bank account can be thinner, customers have to be vigilant to avoid penalties, and the consequences of a slip-up are more severe.
Banks raised the average tab for bouncing a check to $20.79 from $20.54. It can go as high as $28.45 in Philadelphia, the study found. The cheapest place to pass a rubber check? San Francisco and Los Angeles, with averages of $12.11 and $12.44, respectively.
Banks are taking a leaf from the credit card industry.
Although credit card companies have eliminated most annual fees, they charge big penalties when customers are late on payments or go over the limit on their accounts. Some are even charging those who pay their credit card bills off in full each month.
Automated teller machines are another battle ground for fees.
About 48 percent of surveyed banks impose charges on noncustomers who use their ATM machines. But "some institutions said they were waiting for public furor over the fees to die down before deciding to implement surcharging," according to the study.
Citibank, in a move directly counter to the minimum-balance trend, said Wednesday it would triple to $6,000 the minimum balance that its customers need in their accounts to avoid checking account fees. That is about six times the average minimum balance for no-fee checking in New York.
To soften the blow and at the same time encourage customers to do one-stop banking, the bank will allow customers to count Citibank credit-card and mortgage balances against their minimum balance, in addition to checking account balances.
The nation's second-largest bank conceded that about 100,000 of its customers will pay more in fees when the new policy takes effect in February. But that will be an incentive, said spokeswoman Susan Weeks, to get customers to open multiple accounts at Citibank. In fact, Citibank will offer higher rates on savings accounts and lower rates on many loans to people who have multiple accounts.
But while banks want bigger portions of each customer's business, some are giving customers incentives to depend on them less. About 20 percent of those surveyed give fee discounts to customers who don't ask for their canceled checks, and 4 percent cut fees for account holders who opt to have paychecks directly deposited.
"It's all about pricing a la carte vs. all-service packaging," said Sarah Campbell, research and distribution director at Bank Rate Monitor, a research firm based in North Palm Beach, Fla.
"It lets people buy what they want, when they want so (banks) get the income for whatever service you're using, and you only pay for what you use," she said.
Ed Mierzwinski, a researcher with the United States Public Interest Research Group in Washington, was skeptical that consumers are actually better off with the fee shuffling.
Banks "may be lowering balances to avoid fees," he said, "but they have also created new fees in addition to the monthly maintenance fees, so fees have gone up much more than you think they have."
Mr. Mierzwinski said Citibank's new plan could also discourage customers from shopping around for the best deals.
"I don't want to encourage people to put all their accounts in one bank to get free checking fees, because you might get a better deal on a mortgage or a credit card somewhere else," he said.