Why you should be upset about losing free checking

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.


  • By coakl, January 6, 2011 @ 11:11 am

    Chase is quickly destroying what remains of the once-proud Washington Mutual bank. If you go inside a Chase branch, prepare to hear lots of angry shouting from customers closing their formerly free checking accounts. Or customers now forced to pay $5 for a money order or $8 for a cashiers check.

    You’ll hear loud complaints from others being told that all of their checks will be held for at least a day, no exceptions, (Washington Mutual gave immediate credit on nearly all check deposits).

    Even the many illegal alien customers are fed up with Chase: in Spanish, they yell at the hapless former WaMu employees to express their anger at the $34 overdraft fees. And the $15 extended overdraft fee for every 5 days that your account remains overdrawn. More cries of disgust come from non-customers forced to pay $6 to cash a check drawn on Chase.

    Please, if you must express your anger, remember that each and every former Washington Mutual employee silently agrees with you. They HATE Chase as much as you do. They despise the stupid, unfriendly policies imposed by an evil New York corporate boss. They would leave if the job market were better, but since it is not, they must stay and carry out the orders of their Nazi-like CEO.

  • By alex, January 21, 2011 @ 12:54 pm

    i just closed my accounts. i’m done with chase. i was a customer with Washington Mutual but then i became chase. i was really disappointed because of the fees that they were charging. one of the worst thing was a fee of 3 dollars for every withdrawal from my saving account after the fourth one on the monthly cycle. I HATE CHASE! FUCK CHASE! THEY WILL END ON BANKRUPTCY.

  • By michelle from austin TX, March 3, 2011 @ 11:36 am

    Just closed my chase checking account earlier today which I opened back in the 80’s! I dont know why I waited this long. All my money is split between 2 local credit unions which treat me like a person.The 6$ per month fee was really annoying. there are so many options out there now,so I just took my business elsewhere =)

  • By krentist, March 11, 2011 @ 3:17 am

    I switched to US Bank, very friendly folks who have FREE CHECKING! As I was finishing business with Chase, the guy working there told me they were losing something like 20 accounts a day, JUST AT THAT BRANCH. Their greed is definitely going to come back to bite them in the ass.

  • By City On a Shining Hill, April 3, 2011 @ 9:42 pm

    Well, Chase is chasing away its customers, but let that happen. There is always competition, bringing in the ‘chased’ out customers,such as the local credit union, with higher CD and savings rates, even free checking and business accounts that earn interest (for now, of course). And, online banks and brokerages offer free checking.

    Always a way out.

  • By Ray, September 3, 2011 @ 11:23 pm

    Just closed my Chase accounts today after 15 years with them since it was Great Western Bank. Very liberating feeling similar to taking an epic dump after being constipated. I told them that I was going to ING since they don’t charge fees. The Chase banker was dumbfounded by my decision. I bid him a good day and encouraged him to brush his teeth or at least pop a mint in his mouth. Was that wrong?

  • By Jason, April 24, 2012 @ 12:00 pm

    That’s it, I’m done with Chase. My wife and I have a checking and savings account, and my 6-r old son has a savings account with my wife as a co-signer. They all show up when we login online (i.e., they’re linked). When we moved a three years back, their stupid computer system never changed the mailing address on my son’s account. Never noticed because we’re paperless. They have now closed my son’s account and turned over the funds to the State as unclaimed property. Never once did I receive a letter, phone call, or email. They said they sent notices to our frickin’ old address and that was it. Now I have to send in all kinds of notarized documents to the State and wait 90 days to get my son’s money back. That’s it, done with these clowns.

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