Don't get too attached to the terms on your checking account.
In the past year, banks have hiked monthly fees, imposed tougher minimum balance requirements and even taken away rewards programs.
The positive spin from banks is usually that the changes are part of a revamping intended to give customers more personalized options. But it's not a coincidence that they come at a time when the industry is facing a dramatic drop in revenue.
As part of the sweeping financial overhaul last year, Congress directed the Federal Reserve to set a cap on the fees banks can collect from merchants whenever customers swipe their debit cards.
Banks say the Fed's current proposal could slash the $16 billion they collect each year from stores by up to 90 percent.
But even as they scramble to recoup the lost revenue, banks need to be careful not to alienate customers. So with a little vigilance, there are usually ways to keep costs down or hold onto the terms you value.
Here's what to watch:
1. ATM WITHDRAWALS
Hitting up another bank's ATM usually results in two fees: one from the ATM operator and another from your own bank.
The average combined cost of hitting an out-of-network ATM was already almost $4 last year, according to Bankrate.com. And the evidence suggests that figure is headed sharply higher.
For customers with basic checking accounts, Citi now charges $2 for using an out-of-network ATM, up from $1.50. And PNC Bank and TD Bank this month stopped reimbursing customers for the fees they incur at out-of-network ATMs.
Chase hasn't hiked fees for its own customers. But for non-customers, it's testing ATM fees of $4 in Texas and $5 in Illinois. The bank operates the second largest ATM network with 16,000 machines.
It's always been a good idea to avoid using another bank's ATM. Now that banks are searching for ways to squeeze more from accounts, the incentive is stronger than ever.
2. DEBIT REWARDS
There are already signs that rewards programs for debit cards could become extinct.
Chase recently began notifying customers that they would no longer earn points for debit card purchases starting in July. The bank had already ended new enrollment in the program last month.
PNC Bank also told customers with free checking accounts this month that they would no longer get debit rewards as of Sept. 12.
One way to hold onto debit rewards? Check if the program is still offered for premium accounts. Both Chase and PNC say select customers with premium accounts will continue getting rewards for debit card purchases. But those accounts are designed for those who maintain higher balances.
So if you value debit rewards and your bank tries to take them away, check if there's a way to consolidate or rearrange your accounts. Banks are increasingly giving perks to customers who bring them the most business.
3. MONTHLY FEES
The "free" checking accounts banks advertise increasingly require customers to meet certain conditions. For example, monthly fees might only be waived if a customer maintains a minimum balance or sets up direct deposit.
Wells Fargo, for example, did away with free checking last July. It now offers an account that comes with a $5 monthly maintenance fee. But the charge can be waived if you maintain an average daily balance of $1,500 or set up a monthly direct deposit of at least $250.
E-banking is another option banks are pushing.
At Bank of America, customers can get free checking if they opt for e-statements and do their banking online. At TD Bank, customers with basic checking accounts can avoid the bank's new $1 fee hike, to $3.99 a month, by opting for online statements.
In other cases, customers need to meet higher standards to avoid monthly fees. For example, Chase says direct deposits on basic checking accounts must now be at least $500 to qualify for a fee waiver.
Given all the moving parts, be sure to carefully check any notices from your bank. It could be that some tweaks will be needed to hang onto to that "free" account.
4. OVERDRAFT CHARGES
Overdrawing your account is still one of the fastest ways to rack up fees. Banks charge as much as $39 per violation, no matter how small the charge. And if you don't realize you've overdrawn your account, you could quickly rack up a succession of violations.
This scenario can be avoided simply by declining to enroll in overdraft protection. If you're already enrolled, call your bank to opt out.
A regulation that went into effect last summer prohibits banks from enrolling customers without their consent. But because overdraft fees have been such a lucrative revenue source, some banks have been aggressive in trying to get customers to opt in.
The customer service representative at your bank might pitch it as a protective measure. But the worst that can happen if you don't opt in for overdraft coverage? A flash of embarrassment when your transaction is declined.
Then you simply find another way to pay or walk away.
Source: The Associated Press.