Banks are trying to recoup billions of dollars that they'll lose to new regulations, and it's customers who are feeling the pinch.
How can you avoid getting hit with a barrage of new fees every time you change your account or use your debit card?
Let Mellody Hobson help!
She appeared on "GMA" to answer questions and offer tips to help save you money.
Q: Why are banks introducing the new fees?
A: The new fees are a direct response to new regulations such as the Dodd-Frank Act of 2010 and the Credit Card Act of 2009, that, in part, limit the fees banks can charge merchants when customers use a debit card to pay for a purchase. It's estimated that, through these regulations, about $7 billion will be saved by merchants, who will hopefully pass along the savings to you.
Q: Should you pay a debit card fee, or switch banks?
A: The short answer is maybe. It depends on a number of factors, such as ATM availability and other bank fees. For example, big banks have many ATMS so, most likely, you will only rarely have to use an out-of-network ATM. If you switch to a smaller bank that does not have as many ATMS, you could end up paying more in ATM fees than the debit card fee. Also, don't forget about other fees such as overdraft fees and checking account fees. Before you switch banks, make sure you understand all of these fees. Bankrate.com is a great website to comparison shop for banks in your area.
Q: What are some other bank fees that people should try to avoid?
A: Minimum Balance Fees. The free checking account is quickly becoming a thing of the past as many banks now charge fees if you do not maintain a minimum balance. The good news is that most banks will waive the fee if you set up direct deposit, or if you complete a certain number of transactions with the bank each month. Some banks also allow you to combine your money from different accounts in order to meet the minimum balance requirement, so you should definitely try to keep your checking account and savings account in the same place.
Overdraft Fees. Before the Credit Card Act of 2009, banks gave customers "overdraft protection" that was not protection at all. The bank would "protect" you from having a transaction rejected if you did not have enough money in your bank account, but then charge you $30 to $35 for the protection, possibly turning a $3 coffee into a $38 purchase. The act requires that customers "opt-in" to receive this feature from their banks. Protect yourself from overspending by never, never opting-in.
Also remember that each time your bank introduces a new fee, it will send you a notice by mail or email. Make sure you read and understand every notice you receive and follow up with your bank for more information if there is something you do not understand.