Starting Feb. 8 2011, former WaMu account holders gobbled up by Chase will become the latest batch of customers to lose their free checking privileges. They will still get “free checks for life”, but their “free” checking is about to become “fee” checking.
Washington Mutual made waves in the industry fifteen years ago when they offered what was then a novel idea: no monthly fee and no monthly balance. Those days are long gone, just like Washington Mutual.
Ex-Washington Mutual account holders received a notice in the mail (reprinted below) letting them know the bank is going to convert their “Chase Free Extra Checkings” to “Chase Total Checkings.”
Whereas before these accounts had no monthly service fee or minimum balance, they will now have a $12 monthly service fee unless customers have one direct deposit of $500 or more, keep a minimum daily balance of $1,500, keep an average balance of $5,000 or more in a several deposit and/or investment accounts, or just happen to incur $25 in fees a month. (It’s a half-off special!)
Consumerist reader Jess got one of the notices from Chase and asked, “Is this legal? Can they change the terms of my grandfathered account like this?” Answer: Yes. Terms and conditions can and will change at any time. Sorry.
Anthony wrote that his reaction to the notice was to cancel his account with Chase. Reader Conrad is staying put and paying up. “I don’t qualify any of the above, so that means they’re going to charge me twelve bucks a month for not complying to their standards,” he wrote. Both choices are exactly what Chase and other banks want less profitable customers to do: switch banks or pay up.
Other retail banks have been cutting back on free checking accounts, adding on requirements customers have to meet or else incur a monthly fee:
- This summer, Wells Fargo swapped out its free checking with a new “Value Checking” account that charges $5 a month unless you maintain a minimum balance of $1500 or make a monthly direct deposit of at least $250.
- In September, Citibank “Basic Checking” customers had to make at least five transactions a month or cough up $8 a month.
- Bank of America basic checking account customers now need to set up a direct deposit, get their statements electronically, or maintain a $1,500 minimum balance, or they get slapped with an $8.95 monthly fee.
With the recession, a new saver’s mindset taking hold in the American consumer, and new pro-consumer banking regulations cutting into their profits, banks are looking for ways to cut costs and establish new revenue streams. And after cutting back on credit cards and other loans, taking away the “R” from “Free” in retail banking is the next place from which they’re taking their pound of flesh.
THE TAKEAWAY: If you want to keep fee-free checking and you avoid the new restrictions, try going to a local credit union or get a free online checking account.