Under Duress, One Big Bank Finally Starts Treating Customers Better

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JPMorgan ChaseEver since the government's bailout of the banking industry nearly four years ago, the love-hate relationship between banks and their customers has stayed at a fevered pitch. After a series of moves designed to punish customers in the name of improving profits, banks may finally be getting the message that enough is enough.

JPMorgan Chase (JPM) recently announced that beginning next month, it will stop charging overdraft fees for purchases with debit cards that are $5 or less. But as a CNNMoney article pointed out, the bank made this fee-cutting move as part of a class action settlement with customers who alleged that overdraft fees were excessive.

Nickeled-and-Dimed (and $34-ed) to Death


Overdraft fees are just one way that banks have tried to recoup some of their lost income in the wake of the financial crisis, and the consumer protection reforms that followed it. Banks have cut back on rewards for using credit and debit cards, and pushed harder for customers to pay for expensive payment-protection plans. They've also made it harder to qualify for fee-free checking accounts, and raised fees on certain services.

But overdraft fees are particularly egregious, especially in the context of tiny payments. Overdraw your account even by $5 and you'll have to pay a $34 fee -- and no matter how small additional overdrafts may be, you can end up paying several times and owing far more in total fees than the amount you actually overdrew your account.

Just don't pay!

Paying bank fees unnecessarily is a major drain on your budget, but you can stop them pretty easily if you put your mind to it. Because no bank is paying very high interest rates right now, choose your bank based on avoiding fees, looking for banks that offer convenient in-network ATMs and branches to keep you from having to use high-fee alternatives to get at your cash. Similarly, stick with simple accounts and make sure that you never go below minimum balances to avoid monthly account fees.

As nice as it would be for banks to treat you better out of the kindness of their hearts, that's not going to happen. You really have to watch out for yourself if you want to keep banks from earning more than their fair share of profits on your money.

For more on smart money moves:
Motley Fool contributor Dan Caplinger always watches out for his money. He doesn't own shares of the companies mentioned. You can follow him on Twitter here. The Motley Fool owns shares of JPMorgan Chase.


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Sterling

I also told chase to take their own hike too. They were nickel and dimeing me to death. I moved my business accounts and closed my credit cards with them. Even with my business I pay in cash whenever possible to my suppliers and they are willing to give me bigger discounts because I pay in cash and up front. Not thirty days later. The only way to hurt a bank is stop letting them make money off you america. Pay in cash and stop paying with a credit card unless you have the cash.

June 28 2012 at 1:01 PM Report abuse +1 rate up rate down Reply
JOSEPH

I pulled all of my accounts out of Chase about a year ago and will not return to them.

When I went to the bank to pull out my funds, which they made me jump through hurddles for, them offered me a higher interest rate.

Why didn't they do that in the first place?

June 28 2012 at 8:33 AM Report abuse rate up rate down Reply