Citi scraps fee waivers; low-balance account holders will pay
Filed under: Banks
As reported in the New York Post, Citibank plans to eliminate the two fee waivers that had been available on its two basic checking accounts nationwide early next year.Previously, customers who had an "EZ" or "Access" checking account and didn't keep a minimum balance of $1,500 could avoid paying $7.50 or $3 per month, respectively, by arranging a monthly direct deposit or using the account to auto-pay two monthly bills.
Beginning in February, those fee waivers are being eliminated, so the only way a person who has one of these accounts can avoid the fee is to keep $1,500 or more with Citibank. Now, that $1,500 doesn't all have to be in that checking account; it can be in another Citi account or a CD, but it needs to add up to $1,500 if you don't want to pay the fee.
A spokesperson for Citi told Walletpop about another Citi checking account that has no minimum balance -- but that one also comes with a $3 monthly fee. Currently, once the new eliminations of the fee waivers kick in, Citi won't have any no-fee, no-minimum-balance checking accounts.
The Citi spokesperson told Walletpop that this change was expected to affect only a "relatively small" number of the bank's account holders but did not further elaborate as to the number of customers who will have to pay the fee come February. A Citi bank manager interviewed by the New York Post, though, admitted that working-class customers who don't have a $1,500 cushion will be hard-hit by the fees -- which could total up to $90 annually -- and might pull up stakes and switch banks.
As the New York Post article also points out, if enough customers switch their banking out of Citi, the company could rethink their fee policy; however, if people either save up enough for the minimum or just pay the fee every month, it could send a strong signal to other banks that customers are willing to pay for their checking accounts.
"Citibank's balance requirements and monthly service fees are among the lowest in the industry for similar packages," the spokesperson said, part of a statement about the changes sent via email. However, a quick check of some other big banks' websites turn up better offers.
For instance, Bank of America's "My Access" checking account has no minimum balance requirement and charges no monthly fee if the account is opened online. Chase's "Chase Checking" account has no minimum balance requirement and no monthly fee if the user has direct deposit or if they use their debit card five times per month (otherwise, it's $6 a month). Wells Fargo's "Basic Checking" account waives the $5 monthly fee if a customer keeps $1,000 in the account or if they have direct deposit.
Readers, what do you think? How does Citi's new deal stack up?
Reader Comments (Page 1 of 5)
11-13-2009 @ 7:47AM
Kat said...
Citibank is the slezziest company around, they get bailout money, then turn around and charge over 30 percent interest triple the total amount due on your account and then hire slezzier attorneys around the country to get judgements on people that have no money to pay, which results in liens on property. Citibank should be investigated by the goverment for unlawful practices, the ceo's should have to walk a mile in our shoes and go without bonus, vacations and food.
Reply
11-13-2009 @ 9:13AM
C Wester said...
Citi can't hold a candle to Chase for sleeze!! Had an account with them for over 10 years, never late payments, almost always paid the full balance every month and suddenly they cut my credit line in half and increased the APR on the card. I had two cards, one with a $75 annual fee and one with a $375 annual fee that I used for business but they didn't bat an eye when I cancelled both. Anyone that does business with Chase is nuts!!
11-13-2009 @ 10:12AM
john pruett said...
this is just aniother way for banks to stick it to us. am i surprised?
no! they have been doing it for years.
the goverment don't care.
11-13-2009 @ 11:34PM
Maria said...
Oh where do I start? Bailout? I don't agree either so I choose to bank with BBVA Compass. They are the only large institution who did not take bail out money.
Fees & Banking 101? Do any of you recall that it is only in the recent past that monthly service fees were NOT charged on Checking accounts with lower balances? Banks are for profit organizations. Business who are in business for profit do not give away their services for free. Up until 10 years ago we ALL paid fees on accounts. Then the banks decided to offer free check and charge higher fees on check cashing and Overdrafts to cover for the monthly maintenance fees they were no longer collecting. I do not agree with the Overdraft policies but the facts are the facts, this is why Overdrafts have become so expenses. Banks earn billions of dollars annually on Overdrafts.
More Banking 101. When a bank cashes a check for a non account holder there is a risk. Our criminals are crafty and daily present checks which are fraudulent. If a non account hold walks in presents a check, the bank cashes it THEN finds out it was fraudulent the bank just loses that $. Consequently banks have decided to charge a fee to all NON Account holders to help cover the expense of fraudulent items. I'm sure you would do the same if you were at risk of taking those types of losses.
So be proactive, if you are opposed to the TARP Bailout, don't do business with Banks, or the multitudes of other business, that have requested or accepted TARP Funds.
Finally, Banks are for profit organizations. Find a bank, with fair fees, who employs knowledgeable Bankers to advise you financially. Finding a Knowledgeable Professional Banker is just as important a good Doctor, Attorney, Accountant, etc. You really do get what you pay for. Most of us are suspicious if we are offered something for nothing, right? So why then would you expect to bank for free?
11-16-2009 @ 7:08PM
noturz29 said...
OH always citibank.. Go fig. .get the bail out and now steal from consumers..Serioulsy who has that kind of money laying around when jobs are closing up or going over seas. People are struggling and they thing that if they start a trend that people are able to keep 1500 in the bank , the other banks will follow?
Good god. I dont get my 40hr a week anymore. so now what?
I too have citimortgage I take that is also a citi bank thing.
and they cannot help you when ur behind in your mortgage.. They say they have all these options but everyone we do not qualify for. Or the new one HOPE NOW.. again do not qualify for. So now what Just let the house go back? I am just glad i only have to struggle to keep the mortgage up and not a checking account as well.. Heavens sake I be broke to hell. all my money going into a bank to sit earning next to nothing for interest,when i can be keeping my bills up to date.
11-13-2009 @ 8:15AM
Joan said...
Wellsfargo is no better, I have direct deposit they still charge me a monthly fee
Reply
11-13-2009 @ 8:21AM
Big B said...
That is B.S! Why do WE, the people who are putting the money IN the account, have to pay MORE money to not get a fee. Or better yet, why do we have this standard that tell us how much we HAVE to have in the bank to avoid the fee?
This really pisses me off. Now banks are charging you for not having an account with them too. I have been to two different banks to cash personal checks that have been written to me, and at each bank, they ask if you have an account (which is standard), and if you don't they tack on a fee. I have had to pay a $6, fee, and the last was $10.
Now you have to know how much their banks fees are BEFORE you can charge people? Like I said earlier...this is B.S!
Reply
11-13-2009 @ 9:04AM
Shanna said...
I understand how you feel about not being able to cash a check without paying a fee, but you have to understand the banks point of view. The money in each bank is there for the account holders and if the allowed everyone to cash a check that didn't have an account they would be losing money for their holders. Whenever you have a check written to you always go to the bank that it is written on. Most of the banks will not charge to cash it and you will be able to make sure the money is really there. I learned all of this the hard way, but now that I know the reasoning behind it I understand completely. Now, the idea of eliminating waivers in order to acquire monthly fees, that's a crock of BS for real!!!
11-13-2009 @ 10:02AM
Don said...
Having a bank charter and an insurance charter is a license to steal. Now they get our money in government bailouts and have the ba**s charge more service fees. The smart move would have been to let them all fail.
11-13-2009 @ 8:23AM
csr said...
It is about time that everyone pull their hard-earned cash out of these banks; the bailout was for helping them recover from their stupidity, or robbery, and it was to open up credit and create or save jobs; the banks are now giving billions in bonas money to their already rich, screwing customers, and forclosing on the poor. This act of Citi will only result in more poor becoming poorer, and this will hurt 'Seniors' who do not have computers and do not do on-line banking. One word for these banks, it is 'BASTARDS'.
Reply
11-13-2009 @ 8:52AM
GLEN said...
Bank of america charges 6 dollars to cash a check, if you dont have an account with them. The company i work for has them for payroll, i have an account with Citisens bank. I dont think they should be able to take a meal off my table, not a good meal, but a meal . unless i have an account with them. Makes me never want to deel with them , ever.
Reply
11-13-2009 @ 8:56AM
Bill said...
Considering how the American public bailed out Citi, saving them from complete and utter financial ruin, Citi should be the one paying the customers a fee for staying with them. It's this kind of absurdity that drives me nuts. The banks are completely irresponsible, they created the market meltdown, they get a huge bailout from the American people, and what do the banks do to say "thank you"? They impose fees, hike their interest rates on loans, and make it difficult -- if not impossible -- for people and small businesses to access credit. It's criminal and disgusting.
Reply
11-13-2009 @ 9:22AM
Steve said...
Friends, I worked for a larger National Bank years ago. If I write you a check drawn on/against say Chase Bank they MUST cash it for you FREE even if you don't have an account! You will have to produce sufficient identification (Drivers License or Gov't ID is usually adequate). If they presist trying to charge you ask for the manager, make a fuss, they know they have to do it. The check is a promisary note from me their customer and demands them to pay you the money out of my account. Big banks try to pull fast ones on the working class, they know they aren't suppose to but hey since there is no penalty involved if they get a way with it they will for sure try.
Reply
11-13-2009 @ 9:30AM
Steve said...
Glen, read my comment below your's. In short they can't ask you to pay to cash a check drawn on their bank, they are obligated to pay you as long as you can provide ID. If they continue tell your employer what they are doing, they aren't allowed, the check is a monitary obligation the bank must fulfil they just want to make money on every transaction if possible. If no luck ask your employer to either start paying you the extra $6 their bank is charging you to cash their check or ask to be paid in cash. If the employer starts tying up the bank every payroll time getting cash for every check and having them put each in a little envelope, the bank will back down very quickly. Trust me, it's happened before.
Reply
11-13-2009 @ 9:52AM
Gere said...
Its time we just called a spade a spade.These huge banks have bought off Washington DC. That the taxpayers were screwed into bailing them out and then subjected to their legalized theft that's occured since Congress gave them a year long free pass to raise account access fees and use any excuse to do so. The Fed is offering them 0% interest access to capital, and then the banks turn right around and charge uwards of 30% interest to custeomers regardless of credit history or risk.At the same time savings account interest rates run in the sub 1% return level. Talk about having your cake and eating it too. I happen to think that the most honest guy in Washington is Ben Bernanke, and if he had not been around a year ago, someone like Dodd or Frank would have totally decimated the economy with their meddling. As it is, the President seems to be asleep at the switch in these matters. How much more fiscal misery are we the people expected to endure before the blame, not to mention pain, shifts over onto the very industry that got us into this mess, due to their unending greed, in the first place? Sadlky we still have columnists trying to defend the yearlky bonuses these folks keep voting themselves while regular folks lose homes, vehicles, and self respect in th eprocess. I personally never dreamed I'd be unemployed for over a year and about to lose everything I own at this stage in my life. I have worked my ass off for 40 years and I ma worse of now than I was when I entered the workforce in the early 70s. At least then I had a clean slate and no real debt to contend with when I was out of work. Hey Obama, get off your ass, and do something! Anything is better than the absolute nothing you have done so far.
Reply
11-13-2009 @ 10:04AM
Big Richie said...
FORGET ALL BANKS, THEY ALL SUCK, WHAT HAPPENED TO THE $750 BILLION THEY JUST GOT FROM THE GOVERNMENT. TALK ABOUT GREEDY, THEY SHOULD ALL GO EAT &$%@!!!!!
HAPPY HOLIDAYS!!!
Reply
11-13-2009 @ 10:19AM
diane said...
I am currently a dissatisfied account holder with Citbank...There are certain things that they have put into play with their accounts that are downright consumer unfriendly. I plan to opt out of my credit card which has a $25,000 limit and if I have to pay a charge for my checking account I will definitely close all accounts with Citi. I am considered a great credit risk and my thanks from Amex and other cards have been an increase in my interest rate. When I questioned the increase I was told that I, as a valued customer was only raised X percent as compared to the customer who was raised obscenely high..Since I am a responsible person I will pay off any balances but I will not use these cards again.
Reply
11-13-2009 @ 10:30AM
cliff said...
REMEMBER ABE LINCOLN'S FAMOUS WORDS:""IF I HAD THE CONFEDERATE ARMY TO THE SOUTH OF ME AND THE BANKERS TO THE NORTH OF ME, WHO WOULD I FEAR THE MOST???????
Reply
11-13-2009 @ 10:30AM
cliff said...
WHATS WRONG?? I AM TRYING TO POST ABE LINCOLNS FAMOUS WORDS ABOUT BANKS, AND YOU ARE NOT TAKING THE POST. MAYBE AOL DOES NOT LIKE ABE LINCOLN. WELL, HERE GOES, I TRY AGAIN, REMEMBER ABE LINCOLN'S FAMOUS WORDS, IF I HAD THE CONFEDERATE ARMY TO THE SOUTH OF ME AND THE BANKERS TO THE NORTH OF ME, WHO WOULD I FEAR THE MOST???
Reply
11-13-2009 @ 10:43AM
Joe said...
Solutions:
1. Use cash only. If someone wants to write you a check, have them go with you to their bank and THEY cash the check and give the money to you. Insist on cash OR charge them a fee for taking the check.
2. Do not use ANY bank that took "bail-out" money. Why pay them double. It was your tax dollars they got and you want to give them fees on top of that?
3. Don't forget....Wells Fargo was the bank that foreclosed on soldiers who got sent t war and couldn't keep up with their payments because of less pay they received on active duty.
4. Last....the best kept secret in banking. I quit using banks years ago. I only use Credit Unions now. Much easier to work with and they really try to earn your business.
Reply