Chase’s move to start charging former customers of Washington Mutual’s free checking accounts a monthly fee seems to be garnering quite a bit of media coverage, like this latest article. All the media coverage and grumblings of Chase customers would lead one to believe this isn’t a very well-received change.
On the other hand, some argue that customers are just wining and shouldn’t expect all these freebies anyways. It costs money to offer a service like checking accounts and customers should be prepared to pay for it.
So who’s right?
Yes, banks are a business and as such it is perfectly reasonable to charge for services, like checking accounts. But the assumption that free checking isn’t a viable business model is simply incorrect. It took me exactly thirty seconds to find a credit union near me that offers a totally free checking account:
At Menlo Survey Federal Credit Union, you pay no monthly service charge for your checking account and have no minimum balance requirement. Because Direct Deposit provides convenience for you and increases efficiency for the Credit Union, you first order of checks will be free if you sign up for Direct Deposit of your net pay.
Get it, the checking is free regardless of direct deposits or balance. Signing up for direct deposit gets you an ADDITIONAL benefit of free checks.
Chase, on the other hand, has opted to create some truly obtuse rules for qualifying for free checking that almost seem to be specifically crafted to piss people off; it’s almost as if they are specifically trying to demonstrate they simply don’t care about the customer.
But the real reason free checking is a very reasonable demand is that the banks, especially the big ones, really really need their customers.
You see, depositors are providing something a bank like Chase desperately needs, capital, and bank deposits are some of the best capital a bank like Chase can get, because it costs them very little almost nothing. On the opposite end of the customer who has very little money in their checking account, is the customer that maintains a sizable balance and gets virtually nothing for it. For instance, at current interest rates, maintaining a balance of $20,000 will earn you less than one dollar in interest per month. Their rates are so embarrassingly low, it is almost impossible to find them anywhere on Chase’s website.
By charging you a fee when your balance is too low, Chase is basically telling you it wants to double dip; they get to use your money for almost nothing when you have a high balance, and zap you with a fee when you don’t.
Remember, there ARE options out there in the form of credit unions and small banks that offer free checking and good customer service.
Seriously people, time to stop grumbling and find a better bank.