Banks Add Sneaky Fees to Increase Profitability

Last year, the government passed a law which regulated banks. I personally was thankful for the law that stated that the bank couldn't sneak one of those hefty "courtesy overdraft" protections any more without your permission; other laws were passed regarding fees that could be charged for going over the limit on your credit card or making late payments. While these changes may have left consumers cheering, the banks are still trying to maximize your profits. I have recently noticed two new bank fees popping up: charges for replacing your lost debit cards, and a charge for identity theft protection.

Congratulations! You are Now Protected Against Identity Theft!

It is important that you read any letters that your bank sends you in the future; if you don't, you may discover that the banks are charging you for services that you may not want. In a recent letter that I received from my local credit union, I discovered that I would be receiving identity theft protection for only $1.95 per month. I wasn't asked whether I wanted this service or not; I automatically would receive it. The money would be conveniently taken out of my bank account every month. While I've had banks offer me free life insurance policies before, with the option to pay for more coverage if I wanted it, this was the first time that I recall that the bank charging for an item without asking for my permission. Many people will probably overlook this letter; they may already have their own identity theft protection, or they might not want it. If they don't respond by August first, they're getting it (and paying for it) whether they want it or not. My first response was to see if I could opt out of this wonderful program, or whether I would have to cancel my account with the bank. Fortunately, there is a way to opt out, but you will have to look through the paperwork to find the web site, because they don't prominently advertise this option.

Don't Lose Your Debit Card

Another fee that some banks have recently added is a fee to replace a lost debit card. I don't really mind this fee, because I do believe that banks do need to make a profit, but it is an important fee that you should know about. I first learned of this fee when I tried to replace a card from my local credit union that I never received in the mail. Since I had never activated the card, they didn't charge the fee. Although many banks are now charging to replace lost debit cards, you may not have to pay the fee if your card is stolen; Bank of America is not charging to replace stolen debit cards at this time, and you may be able to get this fee waived at other banks too. Right now, many banks are charging $5 to replace a card, but if you need to replace your card overnight, it may cost you more. Bank of America will charge you $20 for overnight service.

Be On Alert for More

Last year's legislation which limited some of the fees that banks can charge must surely cut into the bank's profitability: if you weren't the recipient of one of those $30 "courtesy overdraft" fees, then you should at least be able to imagine the millions of people that did receive these fees, some on a regular basis. You can be sure that banks are going to try to make up for that lost revenue somewhere. If you want to avoid these new bank fees, be sure to read any correspondence that your bank sends you. If you don't, you may discover that you have been signed up for identity theft protection or some other service that you may not need or want.