- Study finds that Americans resent bank fees that benefit only banks
- Most want to find ways of avoiding fees
A new study from international money transfers platform TransferWise has found that Americans are paying excessive bank fees – and are increasingly disgruntled about it.
TransferWise partnered with Ipsos to survey 1,000 people about their experience with bank fees and the outcome is admirably summed up in the opening sentence of the company blog:
“There’s an old saying that ‘it takes money to make money’. But as Americans are learning, in this country it takes money just to have money.”
Most bank customers, the findings show, don’t know precisely what they’re paying for but do know that they’re paying hefty fees.
In the TransferWise poll, most respondents were aware of only three of these fees: overdraft fees (88% of respondents), investment fees (89%) and ATM fees (91%). However, most were taken aback to discover others, including international money transfer fees (just 32% were aware of these), minimum balance fees (34%), early account closure fees (35%), paper statement fees (37%) and transaction search fees (39%).
Surprisingly, only a small minority believed they’d confronted international money transfer fees before but, as TransferWise points out, “they’re more common than you think”.
The banks are doing roaring business out of these fees. A report in Time magazine in 2016 found that Bank of America, Wells Fargo and JP Morgan Chase made in excess of $6bn out of ATM and overdraft fees alone in 2015.
While bank fees may be good for the bottom lines of the banks, they do nothing for their customers. As personal finance expert Bobbi Rebell (who TransferWise approached for commentary on their findings) put it: “If you choose to have Netflix, you actually get to watch Netflix. Paying a bank fee gets you nothing but less money for you.”
But people are wising up to these fees and learning how to avoid them: 69% said they’d rather drive ten minutes to a cash machine operated by their own bank as opposed to paying fees on an out-of-network alternative. But according to Rebell, that’s not necessary: a phone call to the bank asking them to waive a fee will usually do. If they refuse, it may be time to move to a new bank.
Significantly, millennials (aged 18–34) and Generation-Xers (35–54) are much more likely than the over-55s to pay all of the fees itemized above. But only 54% of the millennials polled knew about the stinging fees charged by their banks for international money transfers, despite their propensity to travel.
Rebell added: “Millennials love to travel, and there are a lot of ways for them to save when visiting, working or living abroad. One critical way is to avoid international money transfer fees. You can pay for experiences in advance, or use services like TransferWise to send money to the people you’re visiting and have them take cash out for you.”
TransferWise is essentially a streamlined Android and iOS app that helps customers manage their money across borders while avoiding fees all of the time. The recently updated app fixes a few glitches in the earlier version and includes a money tracker. It lets customers get paid in multiple currencies (AUD, USD, GBP, EUR) without fees.
As Forbes contributor Curtis Silver put it: “Considering how many of us not only work digitally but internationally, this is a huge benefit to getting paid, and paying.”