Washington Mutual made a big impact on the banking world fifteen years ago when it introduced a no monthly fee, no minimum balance, free checking account. Of course, Washington Mutual, casually known as WaMu, is long gone, having been purchased by Chase. Chase made a commitment to the former WaMu customers that they would continue to honor the no fee checking account they had previously.
But, it seems that Chase wasn't able to keep their word, and they have announced that they are doing away with the free checking plan for former WaMu customers. The account holders received notice that the bank is going to convert their accounts to “Chase Total Checking” plan.
Many customers are upset with the change, because before there was no monthly service fee or minimum balance, but now they will have a $12 monthly fee unless they either have one direct deposit of more than $500, keep a minimum daily balance of $1,500 or have over $25 in fees during the month.
It seems that lately, more banks are starting to do away with things like free checking. It is as though they are saying to their less profitable customers: “Pay up or switch banks”.
- Wells Fargo did away with their free checking and now offer a “Value Checking” plan that charges $5 a month unless you keep a minimum balance of $1500 or have a direct deposit of at least $250.
- Citibank changed their rule in September, making their “Basic Checking” customers be required to make at least five transactions a month or pay $8 a month.
- Bank of America changed their basic checking so that now customers must have a direct deposit, receive their statements electronically or maintain a $1,500 balance to avoid paying the $8.95 monthly fee.
So, is this legal? Absolutely. Banks can charge whatever they like and change their terms anytime the mood strikes them. Although, changing terms and fees is a great way for banks to lose customers, but they are hoping that many of the checking account holders will simply pay the fee, finding it easier than switching banks.
What makes this situation with Chase worse, is that when the Consumerist called Chase to ask about the changes, they were told that the changes were designed to “reward” customers. Here is what the Chase representative had to say:
"What we're trying to do is reward customers for giving us more of their business, in terms of multiple accounts, or deeper business, in terms of balances or direct deposits." I then asked him if they were also trying to get rid of less profitable customers.
"No, we would like to keep all customers," said the Chase spokesperson, ever dauntless. "We're trying to offer a range of choices for customers so that customers can take advantage of all the benefits of Chase, the convenience and value of Chase."
The inteview concluded with the spokesperson stating that they are continuing to offer ways for customers to take advantage of doing business with Chase. But, many of the former WaMu customers feel that Chase is taking advantage of doing business with them, and they are taking their business to local credit unions, online checking accounts and other local banks.
What do you think about these types of rate changes? I would love to hear your thoughts in the comments.
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By Melissa Kennedy- Melissa is a 9 year blog veteran and a freelance writer, along with helping others find the job of their dreams, she enjoys computer geekery, raising a teenager, supporting her local library, writing about herself in the third person and working on her next novel.
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