The report found that the majority of people, 72%, pay no bank fees at all, but those who do tend to be less able to afford it. In general, the average current account holder in the US indicates paying fees of less than $ 8, including service fees, ATM fees, and monthly overdraft penalties.
Yet families who have suffered a setback in income during the pandemic – whether due to job loss or working hours cut – pay on average more than $ 11 per month in checking account fees. Meanwhile, account holders who say their family’s income hasn’t been affected by the pandemic are paying an average of less than $ 3 a month.
“Those whose personal finances were negatively affected by the epidemic have been hit by the double whammy of higher bank fees,” said Mark Hamrick, chief economist at Bankrate.com. “Unemployment or loss of income can be devastating, but one should try to avoid adding financial insult to the damage by paying too much bank fees when less expensive options abound.”
Those who are already disproportionately affected by the pandemic, particularly people of color, also pay higher bank fees.
While white verification account holders report paying $ 5 a month in fees, blacks and Spaniards pay more than twice that amount, at a rate of $ 12 and $ 14 a month, respectively. White checking account holders are also more likely to say they pay nothing as a monthly fee, with 79% paying zero per month for checking while only 56% of blacks and 50% of Hispanics pay anything per month.
Younger people pay more for their checking accounts than older people. Millennial checking account holders, ages 24 to 39, report paying $ 15 a month in fees. Gen Xers – between the ages of 40 and 55 – pay $ 6 a month, while Baby Boomers, ages 56 to 74, pay just $ 2 a month.
The report found that the average overdraft fee was $ 33.47, while the average total cost of using an off-grid ATM decreased slightly to $ 4.64.
More people switched to mobile banking in 2020, with 64% reporting that they have modified their payment practices to frequently use internet methods as a direct result of the pandemic.
Hamrick added, “Many consumers are playing it smart by actually engaging in social distancing using their banking and payments technologies.” “Once we are out of the epidemic and economic recession, it would be wise to leverage the latest in mobile banking technology to not only save time, but to help stay on top of account balances and fees as well as potentially costly and fraudulent overdrafts.”
The report found that the average account holder has been with his organization for over 14 years. There are now more options to explore when banking, with many regional banks, online banks, and credit unions as well as large banks offering checking accounts with low or no fees.