As interest rates rise, the cost of supposed "free banking" grows higher - usually because they pay close to zero interest on balances. But what's with all the incremental fees?
I recently moved most of my kids balances from Bank of America to another bank so they could earn more than a few pennies each month. I asked the BofA bank associate what was the minimum I needed to keep in each account to not get hit for a monthly fee. She told me $ 250. So that's what I left.
Sure enough, I get hit for a $ 5 charge the very first month. I email customer service. I get a response - did not meet minimum balance of $ 300. I protest that the associate told me it was $ 250, but that I had transferred another $ 50 and to ensure they did not hit me for another monthly fee. I get another email, saying the minimum is $ 500, unless I can provide my daughter's birth date. In less than 60 days - 3 associates have given me three different answers.
Over the course of the last few months I have noticed a pattern of interesting other fees show up. ATM fees for withdrawals overseas (and not great currency conversions), wire transfer fees inbound and outbound at $ 25 a pop, overdraft finance fees even when the balance is never negative .
When I think of checking, savings, brokerage, mortgage accounts and combinations of balances, maximum number of transactions etc. and the "if it is Tuesday and you are wearing green socks" exceptions, the pricing is out of control. I cannot begin to imagine how much time their customer service people spend arguing about fees.
And somewhere along the way BofA has forgotten they are already making more with rising interest rates on our balances. Their pricing could use angioplasty.
