The majority of people, 72%, don’t pay any bank charges at all, but those who do are usually the ones who can afford it the least, the report found. Generally, the average U.S. checking account holder reports paying less than $ 8 in fees, including service charges, ATMs, and overdraft penalties per month.
Households that experienced a decline in income during the pandemic – be it job losses or working hours – pay an average of more than $ 11 per month in checking accounts every month. Meanwhile, account holders who say their household income has not been harmed by the pandemic report are paying less than $ 3 a month on average.
“Those whose personal finances have been negatively impacted by the pandemic have been hit by a double whammy from higher bank charges,” said Bankrate.com senior economic analyst Mark Hamrick. “Unemployment or loss of income can be devastating, but one must try to prevent the financial damage from getting worse by paying too much bank charges when there are so many cheaper options galore.”
Those already disproportionately affected by the pandemic, particularly people of color, also pay higher bank charges.
While white account holders report paying $ 5 a month in fees, blacks and Hispanics pay more than double that amount, $ 12 and $ 14 a month, respectively. White paying account holders are also much more likely to say they pay nothing in monthly fees, with 79% paying zero monthly for checking, while only 56% of blacks and 50% of Hispanics pay nothing per month.
Younger people pay more for their current accounts than the elderly. Millennial account holders, people who are between the ages of 24 and 39, report that they pay $ 15 a month in fees. Gen Xers – ages 40 to 55 – pay $ 6 a month, while Baby Boomers, ages 56 and 74, pay just $ 2 a month.
Average overdraft costs hit a record $ 33.47, while the average total cost of using ATMs outside the network dropped slightly to $ 4.64, the report said.
By 2020, more people will have switched to mobile banking, with 64% indicating that they have adapted their payment habits to more use of online methods as a direct result of the pandemic.
“Many consumers are playing it smart by basically taking social distance with their banking and payment technologies,” Hamrick added. “Once we get out of the pandemic and economic downturn, it still makes sense to take advantage of newer mobile banking technologies, not only to save time but also to stay on top of account balances and fees, as well as potentially costly overdrafts and fraud. “
The report shows that the average account holder has worked at his institution for more than 14 years. There are now more options to explore in banking, with many regional banks, online banks and credit unions, as well as major banks offering checking accounts at low or no cost.