If you have a checking account with Bank of America, you may be dismayed to learn the bank has changed its rules. Now, account holders with Bank of America are considering fleeing.
The rule change has significant impact for low-income users. Now, if your account does not meet certain standards, a $12 monthly fee will be charged.
The monthly fee will be waived for all accounts that have a minimum balance of $1500.
Alternatively, the fee will be waived if the account has at least $250 in direct deposits each month.
Students under the age of 24 may also be exempt from this policy. For many, these exemptions are simply not good enough.
The policy, which began in 2015 for some customers, has now been applied to all customers this month.
Not surprisingly, anger and confusion have followed in the wake of the policy change.
It can be difficult to maintain a minimum balance that high. For that reason, many customers believe this policy unfairly targets the working class.
Some may argue that $12 a month is not a large fee. However, further investigation proves that, for someone earning the minimum wage, this fee is actually quite substantial.
Nate Becker of the Wall Street Journal explained on Twitter:
“Bank of America kills free checking accounts below a certain balance. Seems like nothing, but to somebody working 40 hours a week at federal minimum wage, that $12/month fee amounts to 1% of pretax income.”
Bank of America kills free checking accounts below a certain balance. Seems like nothing, but to somebody working 40 hours a week at federal minimum wage, that $12/month fee amounts to 1% of pretax income. https://t.co/uu2kYDJ1Gg
— Nate Becker (@natebecker) January 22, 2018
Steve Inskeep of NPR broke it down further, explaining that “If you have $1,000 in the account, $12 is 1.2% of it — per month.
“Multiply by 12 months: people without much money are charged an annual rate of 14.4% for the bank to hold their money and process checks.”
An annual rate of 14.4% is simply too high for many to afford. As a result, many are closing their Bank of America accounts without delay.
Many people are advocating local credit unions, which often have low fees and rates.
Regardless of which bank you use, be sure to stay updated on any policy changes that can affect your wallet.
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