Consumer Alert: Increased Bank and Credit Card Fees
Mellody Hobson sorts through pages of fine print and tells you how to save.
June 30, 2009— -- Banks and credit card companies across the country are still feeling the effects of the recession.
And recent banking reform legislation passed by Congress limits their ability to raise interest rates. So guess how they're looking to make up for the lost revenue? You guessed it: They're increasing the fees they charge customers.
Banks and credit card companies are notorious for the fine print in which they bury information on fees. Most Americans don't go through it line by line, but even if they did, it would be hard to get a clear picture of what's new.
ABC News financial contributor and president of Ariel Investments Mellody Hobson goes through the changes and decodes the fees that are going up.
It probably comes as no surprise that the fees that are going up are the three that consumers get hit with the most.
It's a triple-whammy of higher bank overdraft fees, higher ATM fees and higher credit card late payment fees. And because these are such big sources of revenue for banks -- they'll collect about $39 billion dollars in overdraft fees alone this year -- banks are making it easier for customers to slip up and paying these fees.
"The thing is, it's getting so much easier to trip over these fees," Hobson said.
Consumers need to be wary. For example, here's a customer with a debit card who has only $5 in his or her bank account and is about to spend $20 on a T-shirt. Banks will now say, sure, let that transaction go through. So you get a T-shirt you don't have the money for and they get a big fee.
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