Many Americans Shocked and Disgusted by Bank Fees
Six in ten Americans (61.9%) describe themselves as “shocked” or “disgusted” when they discovered the average U.S. household spends $290 in bank fees each year, according to a recent report from TransferWise. Many felt these fees were higher than they should be.
TransferWise’s The Wolves of Main Street: A Study on U.S. Bank Fees found customer ignorance may be to blame for these fees. While 78% of the 2,000 respondents said they had not read their bank accounts’ terms and conditions, nearly half (46%) believe they are aware of every fee their bank charges. 28% said they were aware of the “big fees” and 10% optimistically believe their banks do not charge fees for things like overdrafts or ATM usage.
“Americans are likely caught in a vicious cycle that benefits the bottom line of the big banks – we don’t care enough about bank fees because we’re duped into thinking they’re far lower than they are,” said Joe Cross, U.S. General Manager at TransferWise. “Banks also create [terms and conditions] so tedious, that we don’t take the trouble to find out how much we’re actually paying. We need to wake up to the daylight robbery and start demanding fairer, proportional and transparent pricing.”
When asked which fees were most unsatisfactory, 46% of the respondents said ATM fees were the most unfair. The majority of respondents (95%) felt non-network ATM fees should be less than $2, and only 6% of the respondents said that fees above $3 were fair. The current average fee is $4.52, which is an increase of 21% from 2010.
Many respondents were also dissatisfied with their overdraft fees. 60% felt these fees should be less than $5, and 27% said there should be no fee at all. Only 15% said an overdraft fee of $11 or higher is fair. The typical overdraft fee is nearly $30, but most Americans believe the fee averages $5.69.
According to the CFPB, the top 628 U.S. banks made over $11 billion in overdraft and NSF fees last year.
Even though Americans are unhappy with their banks, they are unlikely to shop around for a better deal. Only 30% have considered switching, and a mere 19% have changed banks. Nearly a quarter (23%) have not considered a switch because they believe all banks charge about the same fees.
Of all age groups surveyed, Millennials were most likely to switch banks for lower fees: 35% said that they would ditch their current bank.
Other key findings of the report include:
- 32% of men admitted to not having read their terms and conditions, compared to 26% of women.
- 18-24 year olds were mostly like to believe that their banks didn’t charge fees (14%).
- While only 15% of 25-34 year olds think their banks charge fair fees, roughly a third of all seniors thought the fees were fair.