You can Avoid Checking Fees and Even Make Money on Your Checking

While the big banks have dropped the idea of charging monthly fees for using your own debit card, there are still some nasty charges out there for checking account customers.
To compete with the big boys, many smaller banks around the country are not only skipping the fees, they’re offering substantial dividends. Are there any catches in order to access this largess? You bet. But if the requirements to access these returns are within – or close to – your normal banking behavior, it’s no big whoop.
Let me give you an example. In California, where I live, Community West Bank is offering a 2.53 percent yield on up to $15,000. The requirements? Each month you:
• Must complete 10 debit card transactions;
• Have a direct deposit or automatic debit transaction;
• Receive an electronic statement
• Access online banking.

At Bank of the Sierra, the qualifications to earn 2.09 percent on up to 25 grand are:
• Minimum 12 Sierra Check Card purchases per qualification period
• Minimum one direct deposit or automatic payment from your account per qualification period;
• Make at least one payment using Sierra BillPay per qualification period;
• Enroll and receive electronic statements.

Financial institutions in almost every state have similar deals, some with rates above four and five percent.
In a recent survey by Bankrate.com, just 45 percent of the banks in the 25 largest markets are offering free checking. In 2009 76 percent of these banks offered free checking.
To qualify for the high interest rates, you typically must be a resident of the state where the bank operates. And they all have restrictions similar to the ones above.
You can find banks in your state at the web site www.depositaccounts.com, run by Ken Tumin.
Credit unions sometimes offer competitively high rates as well, and, like banks, they have account insurance. If you tend to keep only relatively small amounts in your checking account, as I do, then I favor credit unions. And since I don’t use a debit card because it’s like carrying cash in your wallet if anyone obtains your PIN, I favor credit unions. But if you do a lot of debit card purchasing, the high-rate checking accounts may be just right for you.
The Consumer Gal and I make most purchases with a credit card and earn two percent back on those transactions. We pay off the entire balance each month. That’s the only way credit cards work to your advantage.
If you are looking for a credit union in your area, check out the web site above or www.creditunion.coop.
Happy holidays. And remember:
Whoever holds the money has the power.

 

Debit Card Fees by the big Banks may be Just What the Doctor Ordered

While thousands of angry people across America are joining Occupy Wall Street and its nationwide clones, Bank of America seems oblivious to the upsurge. Here’s how it works: If you use your debit card during any month, your account is debited five bucks for that month. If you don’t use your card, there’s no penalty.
The banks are saying they are forced to raise fees because of all the new restrictions on them. The most relevant rule, which went into effect on October 1, restricts the amount banks can charge retailers for debit card transactions to 21 cents. That’s down from 44 cents.

Even the Pentagon has a credit union!

Ohhh, poor banks! Chase Bank and Wells Fargo are testing $3 monthly fees. Sun Trust is jumping on the $5 bandwagon.
Good! Good? The Consumer Guy® likes bank fees? Nah. But I do like the idea that the big boys are making the small ones more appealing. I closed two Chase accounts last year and moved the dough over to the financial institution where The Consumer Gal keeps her money (yeah, we know, it’s strange that a couple has independent solo accounts) – a Credit union across the parking lot from Chase. Now these accounts are subject to virtually no fees. Citibank is standing pat with no debit fee as well.
In case you do not remember, the big banks are partly responsible for the meltdown of the U.S. economy, no small part of which had to do with bad mortgages. Then they took massive bailouts from U.S. taxpayers, only to deny hundreds of thousands of needy homeowners a break on their mortgages. So it warms the cockles of my heart, whatever they may be, to know that as the banks are finding an array of fees with which to hit their depositors, they are also giving those customers an incentive to say hasta la vista, and to look for better deals at local banks and credit unions.
It’s my hope that bank depositors will be willing to look at local financial institutions for free – or at least low cost – services. In other words, support local businesses. Just make sure they don’t charge other fees, like checking account or teller fees.
Here are some other ways to save on debit card charges.
• Pay cash. Just make sure that you extract the money from an ATM that doesn’t charge a fee. Either use your own bank’s ATM or one on its no-fee network.
• Use a credit card, but only if you pay off your entire bill each month. If you carry a balance, that’s costing you interest each month and makes credit purchases impractical. For information on choosing credit cards with the best benefits, do a web search for ‘best credit cards” – avoiding search results paid for by credit card issuers – and decide if you want money back, airline miles, or whether you want to pay an annual fee for expanded benefits.
• Try online banking. I am not a big fan of online banking because I’m fearful of compromising my personal information and becoming a victim of identity theft, or worse. If you are an Internet whiz kid, check out the services at  institutions like Ally Bank, Discover Bank and ING Direct, among others.
If you decide to switch banks, Consumers Union offers a checklist for consumers who want to switch at www.DefendYourDollars.org.
Don’t feel locked into your current financial institution. Free competition can be a very good thing for consumers.