Citibank's turn to raise fees
#1
Team Owner
Thread Starter
Citibank's turn to raise fees
Citi announces new fees on checking accounts
http://finance.yahoo.com/news/Citi-a...&asset=&ccode=
http://finance.yahoo.com/news/Citi-a...&asset=&ccode=
The fees keep coming. Citi is the latest big bank to slap customers with a round of fee hikes. This time, on its checking accounts.
Starting in December, customers who hold its mid-level Citibank Account will be charged $20 a month if they fail to maintain a minimum balance of $15,000 in their combined accounts. Previously, account holders had to carry a minimum balance of $6,000.
At the same time, customers who have the bank's EZ Checking account will start being charged $15 a month if they don't carry a minimum balance of $6,000. Citi (C) says it is phasing out the EZ Checking package, which currently carries no monthly fee, and is instead offering customers either the Citibank Account or its Basic Banking account, which also carries a fee.
Last month, Citi said it is hiking the fee on its Basic Banking account from $8 to $10. Customers will be able to avoid paying the $10 fee by either maintaining a minimum balance of $1,500 or by making one direct deposit and one automatic online payment through their checking account each month, said Citi.
Currently, account holders must make five online transactions per month in order to avoid paying the fee and there is no minimum balance requirement.
Citi's fee hikes come just days after Bank of America announced it would charge a $5 fee for debit card purchases. Wells Fargo, JPMorgan Chase, Sun Trust and Regions Financial have all also rolled out similar fees in select markets in recent weeks.
"The regulatory environment has changed a great deal -- particularly with the Durbin Amendment -- and we're seeing the results of that now," said Claes Bell, banking reporter with Bankrate.com. Going forward, "we're going to see more large national banks announce fees."
With the new regulation that caps how much revenue banks can get from the swipe fees they collect from merchants, banks must look for other ways to cover that lost income, explained Nessa Feddis, vice president and senior counsel of the American Bankers Association.
"We don't expect to pay nothing to ride the train, it's the same thing with a checking account," she said.
Citibank said it chose not to charge a debit card fee because its customers did not want it. "There's a reason why we structured it this way," said Catherine Pulley, spokeswoman for Citi. There are also no hidden fees, Pulley added, and customers will benefit from free online bill pay and free access to non-Citi ATM machines.
While the majority of checking accounts were free last year, less than half now come without a price tag, according to a recent study from bank-comparison site Bankrate, which looked at 243 interest and 238 non-interest accounts.
Like Citi's new offerings, 92% of checking accounts have fee waivers, meaning that if you can meet certain financially requirements, most checking accounts are -- or could become -- free.
Starting in December, customers who hold its mid-level Citibank Account will be charged $20 a month if they fail to maintain a minimum balance of $15,000 in their combined accounts. Previously, account holders had to carry a minimum balance of $6,000.
At the same time, customers who have the bank's EZ Checking account will start being charged $15 a month if they don't carry a minimum balance of $6,000. Citi (C) says it is phasing out the EZ Checking package, which currently carries no monthly fee, and is instead offering customers either the Citibank Account or its Basic Banking account, which also carries a fee.
Last month, Citi said it is hiking the fee on its Basic Banking account from $8 to $10. Customers will be able to avoid paying the $10 fee by either maintaining a minimum balance of $1,500 or by making one direct deposit and one automatic online payment through their checking account each month, said Citi.
Currently, account holders must make five online transactions per month in order to avoid paying the fee and there is no minimum balance requirement.
Citi's fee hikes come just days after Bank of America announced it would charge a $5 fee for debit card purchases. Wells Fargo, JPMorgan Chase, Sun Trust and Regions Financial have all also rolled out similar fees in select markets in recent weeks.
"The regulatory environment has changed a great deal -- particularly with the Durbin Amendment -- and we're seeing the results of that now," said Claes Bell, banking reporter with Bankrate.com. Going forward, "we're going to see more large national banks announce fees."
With the new regulation that caps how much revenue banks can get from the swipe fees they collect from merchants, banks must look for other ways to cover that lost income, explained Nessa Feddis, vice president and senior counsel of the American Bankers Association.
"We don't expect to pay nothing to ride the train, it's the same thing with a checking account," she said.
Citibank said it chose not to charge a debit card fee because its customers did not want it. "There's a reason why we structured it this way," said Catherine Pulley, spokeswoman for Citi. There are also no hidden fees, Pulley added, and customers will benefit from free online bill pay and free access to non-Citi ATM machines.
While the majority of checking accounts were free last year, less than half now come without a price tag, according to a recent study from bank-comparison site Bankrate, which looked at 243 interest and 238 non-interest accounts.
Like Citi's new offerings, 92% of checking accounts have fee waivers, meaning that if you can meet certain financially requirements, most checking accounts are -- or could become -- free.
#2
It sucks that fees are coming, but companies have to make money (whether you like how much is or not). This just shows that Govt regs, that are to (what the say) help the consumer, just screw them over in the end.
#4
The part that irks me is that instead of cutting costs and making themselves more profitable, they just pass on the difference to the customer. And ironically, they manage money and don't have any sense of frugality.
#5
I now they can't money off of interest, but that has been for many, many years. The cost cutting? That's cutting jobs which many banks have done and many have talked about doing so it the upcoming months. Customers have demanded longer hours for banks and more tellers, not just what used to be called "bankers hours", that has to be paid for.
The new Govt regulations have forced the banks to start charging for things that have been free for the last 20 years. I remember paying for a credit card, (not just American Express) and checking accounts. I've had a checking account since I was 12 yrs old.
The new Govt regulations have forced the banks to start charging for things that have been free for the last 20 years. I remember paying for a credit card, (not just American Express) and checking accounts. I've had a checking account since I was 12 yrs old.
#6
Registered but harmless
Join Date: Aug 2005
Location: Los Angeles, CA
Age: 59
Posts: 14,842
Received 1,102 Likes
on
763 Posts
The situation now is the same-- fees are assessed on accounts, but waived for more profitable customers, or those with more money in their accounts. The difference is that fees can be applied to more usages-- debits, on-line banking, etc.-- not available in the past to create/maintain bank revenue & profits.
The consumer will pay in the end-- whether to retailers, directly to the banks, or to both if retailers do not lower prices as a result of lower credit & debit charges to them.
#7
Drifting
Also - it does say 15k in their combined accounts (which obviously includes savings), while it may seem like an unattainable sum when you're in your early 20's (it did for me), over time, saving properly, you should be able to save up that amount by the time you're 30.
On a related note - this is *exactly* the reason I just left citibank for a local bank in my area, I just knew they were going to start doing sleezy stuff like this.
Trending Topics
#8
IIRC, credit card and account fees were also charged, but often decreased and/or waived for better customers due to competition between banks back in the '70s and '80s.
The situation now is the same-- fees are assessed on accounts, but waived for more profitable customers, or those with more money in their accounts. The difference is that fees can be applied to more usages-- debits, on-line banking, etc.-- not available in the past to create/maintain bank revenue & profits.
The consumer will pay in the end-- whether to retailers, directly to the banks, or to both if retailers do not lower prices as a result of lower credit & debit charges to them.
The situation now is the same-- fees are assessed on accounts, but waived for more profitable customers, or those with more money in their accounts. The difference is that fees can be applied to more usages-- debits, on-line banking, etc.-- not available in the past to create/maintain bank revenue & profits.
The consumer will pay in the end-- whether to retailers, directly to the banks, or to both if retailers do not lower prices as a result of lower credit & debit charges to them.
I'm not defending banks, they have too much control, but when Geithner comes out and says "We will prevail over banks". I just see him being another rich person fighting a cause for the kids of rich people protesting on Wall Street. I just want to laugh.
#9
Drifting
I now they can't money off of interest, but that has been for many, many years. The cost cutting? That's cutting jobs which many banks have done and many have talked about doing so it the upcoming months. Customers have demanded longer hours for banks and more tellers, not just what used to be called "bankers hours", that has to be paid for.
The new Govt regulations have forced the banks to start charging for things that have been free for the last 20 years. I remember paying for a credit card, (not just American Express) and checking accounts. I've had a checking account since I was 12 yrs old.
The new Govt regulations have forced the banks to start charging for things that have been free for the last 20 years. I remember paying for a credit card, (not just American Express) and checking accounts. I've had a checking account since I was 12 yrs old.
That's why i always laugh at the people railing against big banks... if you want to make a stand - pull your money out and put into a credit union.
#10
I disagree with this - look at credit unions. Most if not all of them have the same hours and services as big banks (even sometimes better rates on savings and checking, and better loan rates). But most if not all of them don't bundle in all these fees and such. It's because they are owned by the members - not by shareholders that require high dividends and returns.
That's why i always laugh at the people railing against big banks... if you want to make a stand - pull your money out and put into a credit union.
That's why i always laugh at the people railing against big banks... if you want to make a stand - pull your money out and put into a credit union.
They have two different business models
#11
Team Owner
Thread Starter
I wouldn't mind the fees so much if I didn't get to read about the huge bonuses the bank execs get every year. That's like a kick in the nads. The banks cry poor but yet somehow have millions to shell out in bonuses.
The following users liked this post:
jupitersolo (10-05-2011)
#12
Bonus for Mr. Top Exec for coming up with a way to cut costs (i.e. cut jobs), increase profits (i.e. come up with new fees), etc. even though they're pissing off/losing customers. I can't remember when they've said, "No bonus for me this year" due to their company's poor performance under their watch.
Last edited by AZuser; 10-05-2011 at 01:14 PM.
Thread
Thread Starter
Forum
Replies
Last Post
acurajj
Car Parts for Sale
20
02-14-2016 02:28 PM
Mugen TSX
Eastern Canada
0
09-16-2015 09:52 PM
Mugen TSX
Eastern Canada
0
09-01-2015 11:11 PM
Mugen TSX
Eastern Canada
0
09-01-2015 11:05 PM