Bank fees are more outrageous than ever

By Liz Pulliam Weston

Everybody knows that banks have jacked up fees on those who mismanage their checking accounts and credit cards.

Charges for late payments and exceeding your credit limit have almost tripled in the past decade. Bounced-check fees now average close to $30 -- with some banks charging as much as $45 for an NSF (nonsufficient funds) draft.

Rising credit card fees

	Late fee	Overlimit fee
1994	12.55	12.75
1995	13.25	13.2
1996	14.21	13.94
1997	19.24	18.44
1998	22.1	21.14
1999	25.61	24.96
2000	27.1	25.99
2001	28.29	26.88
2002	30.04	27.89
2003	31.44	29.23
2004	32.61	30.35
2005	34.42	31.22

Source: CardWeb.com

Getting less attention are the fees banks are imposing on their more responsible customers who are just trying to access and manage their accounts. For example:

• ATM fees continue to rise. On average, your bank charges you 25% more than it did six years ago for using another bank's ATM. And the "foreign" bank adds a surcharge that's 40% higher than it was in 1999, Bankrate.com found.

• Cash advances take a bigger bite. Getting cash from your credit card has long been expensive, but the tab has risen sharply in recent years. A decade ago, most credit card issuers imposed a 2% fee with a $2 minimum fee and a $10 maximum fee on cash advances, according to CardWeb.com. Today, the fee is 3% with minimums ranging from $5 (at most issuers) to $15 (at HSBC) and no maximums.

• Stop-payment and returned-deposit fees have skyrocketed. A decade ago, stopping payment on a check usually cost $10 or less, and you generally didn't pay anything if a check you deposited turned out not to be good (other than bounced-check fees if you subsequently wrote checks based on the bad deposit). Today, the typical charge for a stop payment is $25, with one bank, Sun Trust, nicking its customers for $32, according to Bankrate.com. Meanwhile, many banks have instituted returned-deposit fees of $5 to $10 in addition to the cascade of bounced-check fees you might face.

• "Courtesy" services are disappearing. Fees to talk to bank tellers, in person or on the phone, are now standard for many low-balance accounts. Cashier's checks and money orders, once free or $1, now cost $10 and up. Some lenders have imposed fees ranging from $5 to $15 for making payments by phone or online.

• Miscellaneous fees are rising. Balance-transfer fees on credit cards of 3% to 4% are now commonplace, as are 3% foreign exchange fees when you use your credit card overseas. Account research can get pricey as well; banks and lenders may charge $5 for a copy of an old check or $10 for an archived statement.

A bonanza reaped in secret

Discovering all the ways you can get dinged is often a process of trial and error. Banks don't typically publish their complete fee schedules on the Internet, and the first time many people learn about a fee is when it shows up on their account.

One consumer advocate, the U.S. Public Interest Research Group (US PIRG), found the process of uncovering bank fees to be so difficult that it hasn't conducted its once-regular fee survey since 2001.

"It got to be too labor intensive," said US PIRG program director Ed Mierzwinski. "We had to send people to the individual bank branches" to collect information.

All these fees, hidden or not, have helped many banks turn in record profits in recent years. Credit card fees alone jumped 18% last year, to $24 billion. Overall, bank fees are on track to top $55 billion this year, said Robert Hammer of investment banking firm R.K. Hammer.

Bankers say these fees aren't pure profit, though -- far from it. Penalty charges from late and overlimit fees, for example, are used to offset collection costs, as people who max out their cards or pay late are far more likely to default. Other bank fees are used to invest in technology and expand ATM networks.

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