Bank on it: Fees at the nation's financial institutions are on the rise and small-balance accounts are a primary target.
As a result, customers must shop carefully for the bank offering them the best deal for their needs and set a personal banking strategy to avoid paying too much.
One major bank, First Chicago Corp., has received the most negative publicity recently for instituting a charge of up to $3 for some customers each time they use a human teller instead of an automated teller machine or telephone banking system.
Yet the trend toward paying for services is rapidly expanding to all sorts of banks and transactions.
For example, only two of 17 large banks recently surveyed by Bank Network News now charge less than $1 for use of ATMs by customers other than their own. Furthermore, San Francisco-based Bank of America and Massachusetts-based Bay Banks each charge a hefty $2 for such "foreign" transactions.
"Although most banks are reluctant to release information on all their fees, the trend is definitely up," asserted Stephen Brobeck, an executive director with the Consumer Federation of America, which has 250 organization members that represent 50 million individuals. "One consultant identified more than 200 fees that could be charged by a bank to a deposit account alone."
In First Chicago's plan, only customers who keep either $2,500 in a checking account or $15,000 in a combination of checking and interest-bearing accounts continue to have free, unlimited access to human tellers. Previously, a few banks had merely offered discounts to customers who didn't use tellers.
The airwaves around Chicago have been filled with the commercials of other local banks mocking the blatant nature of the new plan, but First Chicago protests that criticism is overblown.
"Our guess is that more than 80 percent of our customers will end up paying the same or lower fees under the new system than they were paying before," said Thomas Kelly, a spokesman for First National Bank of Chicago.
The industry argument is that everyone's boosting or instituting fees because times have changed.
"Due to competition from investment and insurance firms, the move is now on at banks to charge fees for specific services, unlike the past in which artificially low interest rates could subsidize free services," explained Virginia Stafford, a spokeswoman for the American Bankers Association, which represents 90 percent of the industry.
The incentive system is clicking into gear. "Because human teller transactions are the most expensive, banks are considering ways to encourage the use of ATMs through pricing schemes that give incentives to do so," said Fritz Elmendorf, a vice president with the Consumer Bankers Association in Arlington, Va.
A prime example is the nation's largest bank.
"Eighty percent of all transactions at Citibank are now done by some method in which the customers are really doing it themselves, whether by telephone, automated teller machine or home personal computer," said Susan Weeks, a Citibank vice president. "In several of our markets, we're telling prospective customers that if they'll bank at home with us, we won't charge them for the computer software or the use."
Some smart ways to avoid bank fees:
* Shop for the best deals, realizing that by keeping all your accounts together at one institution, you're more likely to receive favorable treatment.
* Request a fee schedule. Scrutinize your monthly statement so you know exactly what services you're paying for.
* Keep the necessary minimum balance to avoid monthly and per-check fees. Don't bounce checks. Those two types of fees represent more than half of all bank fee income.
* Save money by using electronic means for routine transactions. Use only your own bank's ATMs to avoid fees. Consider direct deposit, since banks often use it in conjunction with offering better deals.
* Re-evaluate your accounts to make sure you're using the service that best reflects the number of checks you write each month, your ATM habits and typical balances.