Banks find ways to boost fees; checking accounts latest target

Meanwhile, Citigroup began charging 3% of the transaction for certain debit card purchases and ATM withdrawals made outside the U.S. last year, up from 2% — and in line with the company's fees for foreign credit card transactions.

The bank says its fund transfers to cover overdrafts are now rounded to the nearest $100 to provide consumers with a "cushion" for additional transactions. The bank is also deducting a $10 transfer fee from checking instead of savings.

These changes come on top of Citi's increase in its overdraft fee to $34 per incident from $30 in May 2008. Bank spokeswoman Natalie Riper says the $34 fee is "in line with or better than industry standards."

Higher bank fees, says Joseph Ridout, a spokesman for Consumer Action, an advocacy group, are "part and parcel of what we've seen that the giant banks are trying to apply to cards."

For consumers like Neal Katz, 48, the fees make it less appealing to use their debit cards. As banks tack on all sorts of fees, it's become just as easy to go into debt with debit cards as with credit cards, he says.

"They charge us $35 per overdraft," says Katz, who lives outside Chicago. "So where is the advantage to debit cards?"

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