September 3, 2010

Days of free checking could be numbered

By Cara Restelli, KY3 News

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By Gene Hartley

Story Published: Jan 25, 2010 at 9:24 PM CDT

Story Updated: Jan 26, 2010 at 7:25 PM CDT

SPRINGFIELD, Mo. -- It will soon be more difficult for banks to charge overdraft fees. That's the charge for your bank to cover any overdraft transactions. It sounds like good news, but could end up costing you. To recoup losses, most banks will impose more rules on free checking accounts.

When you swipe your debit card, even if you don't have enough money in your account, chances are good that you can still make your purchase but you have to pay for it. For a fee, your bank will cover you if you overdraw your account.

Following complaints that banks have been abusing this feature by charging excessive overdraft fees, the federal government is cracking down. Beginning July 1, they will not be allowed to charge an overdraft fee that occurs because of an ATM transaction or a one-time debit card transaction unless the customer opts in to the overdraft program.

It's a change that's likely to cost banks billions in fees and cost you your free checking account. According to bankrate.com, to recoup their losses, banks will likely impose more rules on free checking accounts. You might be required to keep a minimum monthly balance, take statements electronically, or use your debit card a certain number of times per month.

For customers like Deloris Merritt, it would be enough to make her consider leaving the bank she's been with for 20 years. “It would be hard to go to different bank, but I'm gonna do what I need to save money,” she said.

For many customers, even a small monthly fee is too much.

“$12 is $12,” said Patsy Aton. “I don't think I’d get used to it.”

We called several local banks and only received a return call from one of them. The banker believes there will always be some form of free checking; it's just a matter of how many obligations you'll have to meet in order to avoid that monthly charge.

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