Craig Johnson, Clark.com
Bank of America recently switched the accounts of customers using its free online-only checking account to one with a $12 monthly fee, according to the Wall Street Journal.
The Charlotte, North Carolina-based bank, which began converting the popular eBanking accounts as early as 2015, is now charging those customers the fee if they don’t maintain at least a $1,500 balance or a monthly direct deposit of $250, the Journal reports.
Report: Bank of America hits lower-income customers with monthly checking fee
The move means that customers who have abandoned their eBanking accounts, perhaps because they began using other accounts or another bank, must pay to keep their new ones open. It also means that people who haven’t demonstrated the means to maintain high balances in their accounts — effectively those with lower incomes — will be penalized.
The move comes less than a year after Bank of America rewarded CEO Brian T. Moynihan with a $20 million compensation package and just a week after it reported that it topped its earnings expectations in the fourth quarter of 2017, thanks in large part to a booming consumer loan business.
It is unknown whether Bank of America told its eBanking customers months in advance that the product would be ending or it was eliminated suddenly. The accounts, which began in 2010, stipulated that customers could avoid a monthly $8.95 fee by using self-service options such as paperless statements, ATMs and online banking transactions instead of a teller.
The change has outraged customers who feel the banking institution is targeting low-income families who don’t have the means to meet the accounts’ monthly balance requirements. A Change.org petition has garnered nearly 50,000 signatures asking that people “let Bank of America realize that this is unfair to their customers that have been loyal to them for years.”
Bank of America and the other three big banks Citi, JPMorgan Chase and Wells Fargo, hold about 40% of all U.S. commercial bank assets. Together they’ve set up a vast network of more than 17,000 bank branches and 80,000 ATMs around the nation, as we’ve previously written. But is bigger necessarily better? Not by a long shot.
How to pick the best banking institution for your specific needs
So if you want a banking institution that lets you keep most of your money, what are you to do? You need to find one that has the trifecta of financial amenities:
- Low or no fees
- High yield savings rate
- No minimum required balance
Money expert Clark Howard says that credit unions and online banks offer the best value when it comes to banking your money.
“What Bank of America is telling its customers is to get lost,” he says. “You should take that message and go to one of the online banking companies or credit unions where you can bank for free.”