Tag Archives: Fee

Cleveland has lowest ATM fees in nation

Cleveland may top the rankings in surveys it doesn’t want to top like poorest city, but there is one survey we’re tops in and it’s a good thing for consumers. Bankrate says Cleveland has the cheapest ATM rates in the country, even though nationally ATM surcharges hit a new high for the seventh consecutive year.

The average ATM fee hit a new high for the seventh consecutive year at  $2.40.  In 2001, the fees were $1.36. The fees went as low as $2.06 in Cleveland. Minneapolis followed at $2.15, and Cincinnati came in fifth place with fees around $2.22. Denver has the highest fees at $2.75.

You’ll pay even more if you use an out-of-network ATM.

“A few years ago, Bank of America moved to the $3 surcharge, which at the time was uncharted territory. Now, it’s the most common surcharge that we find in the survey,” Greg McBride, CFA, Bankrate’s senior financial analyst said. “There was a lot of negative reaction at the time, but it didn’t take long before the industry embraced it.”

You’ll pay even more if you go to a bank not affiliated with yours.  Bankrate suggests smartphone apps to help find an in-network bank to avoid fees. You can also use a debit card (even though I don’t recommend having one — I realize most people have them) to make a minor purchase at a drugstore or other merchant and ask for cash back.

Bankrate surveyed 10 banks and thrifts in the 25 large U.S. markets for its 2011 Checking Study.

Click here to see all the fees for a particular market.

 

 

Airline passengers get more rights on Tuesday

Airline passengers will have new rights starting Tuesday.  It will affect international flights, compensation if you’re bumped from a flight, and fees will be more clearly disclosed. Consumers will gain even more protections at later dates.

If you are taking an international flight, the airline will face big fees if you sit on the tarmac for more than four hours. This will bring international flights in line with domestic flights which can’t sit on the tarmac for more than three hours without big penalties.

There was a lot of controversy with these rules, and some predicted it would lead to premature cancelling of flights so airlines wouldn’t face the fees. Studies have shown that really hasn’t happened. I’ve been on a few flights stuck on the tarmac for short delays and every time they roll out the red carpet. The flight attendants hand out drinks and snacks trying to make your stay on the tarmac as comfortable as possible. The airlines don’t want to get fined because the penalty is steep and adds up because the fee is based on each passenger.

If you’re bumped off your flight, you’ll get more money.  You’ll get double the price of your ticket up to $650 if you are due to get into your destination just a few hours late because of an oversld flight. If the delay is longer, you’ll get up to four times your ticket or up to $1,300.

Make sure you remember this rule the next time an airline asks for volunteers to give up their seats. Never accept the airline’s first offer, because they often increase the reward if no-one agrees to the bump. The pot is often sweetened by hundreds of dollars, so hold out before you agree to bump off a flight.

Plus, you’ll see changes on the airline’s site. All ancillary fees must be disclosed.  Look for checked bag fees, cancellation fees, etc. clearly displayed on the airline’s site. This will be one of the most noticeable changes for consumers.

They’ll be other changes too, but they got delayed to give the airlines more time to prepare for them.  January 24th, new rules related to lost baggage, full fare advertising, purchase price increases, and flight status changes will take effect.

Housing market dips but closing costs on the rise

One of the worst parts of having a loan you’re not happy with, is paying for closing costs to re-figure your loan. Bankrate found the average origination and title fees are up 8.8% from a year ago. On a $200,000 mortgage, the average fees are $4,070.

You’ll pay the most in New York at $6,183. Texas, Utah, San Francisco, and Idaho round out the top five most expensive areas.

Bankrate says most increases are due to the fees charged directly by lenders. Since the collapse of the housing market and economy, there are more restrictions. Last fall I did a story about historic low-interest rates, but cautioned that refinancing will not be the same experience as your last. Mortgage companies showed us loan files that were 1 to 2 inches thick as the red tape has increased since the housing collapse. This survey shows consumers are paying the price for the new red tape.

“Interest rates get a lot of attention, and rightfully so, but it’s also important for consumers to compare lender fees when shopping for a loan,” said Greg McBride, CFA, senior financial analyst for Bankrate, Inc.

Bankrate surveyed 10 lenders in each state during June. The organization got a good faith estimate for a $200,000 mortgage on a single family home with 20% down. The fees Bankrate compiled include title insurance, and appraisals.

Ohio ranked 18th overall in 2011 compared with 13th in 2010. The average fees were $4,165 which is slightly higher than the national average.

Kansas ranked 29th overall in 2011 compared with 25th in 2010. The average fees were $3,897.

Missouri ranked 47th overall compared with 44th in 2010. The average fees were $3,524.

It’s interesting considering the housing market in Northeast Ohio, at least, is far worse than Kansas or Missouri yet Ohio has higher closing fees than the other two states. The bottom line: shop around before you decide on a mortgage.

The newly formed Consumer Financial Protection Bureau is streamlining the forms so a Good Faith Estimate will be easier to understand. Click here to learn more and find out how you can weigh in and help shape the future of the forms you’ll sign at closing.

Related links you may like:
Interest rates hit historic lows
Weigh in on mortgage disclosure forms
Free mortgage payments if you paint your house
Do you know the value of what’s in your home

Millions coming to some former Countrywide customers

Almost  $108 million dollars will be mailed to homeowners who were allegedly overcharged by Countrywide Home Loans. The Federal Trade Commission expects to mail 450,177 refund checks.

The checks are part of a settlement between the FTC and Countrywide over allegations the company collected excessive fees from borrowers struggling to hold onto their home.  Refunds will be sent to customers whose loans were serviced between January 1, 2005 and July 1, 2008, and were subject to the unfair allegations.

Bank of America now owns Countrywide.

“It’s astonishing that a single company could be responsible for overcharging more than 450,000 homeowners,” FTC Chairman Jon Leibowitz said. “Countrywide’s unconscionable behavior harmed American consumers on a massive scale and we are proud to be getting every single dollar back to hundreds of thousands of struggling consumers who can least afford to lose the money.”

The FTC says homeowners in default were charged excessive fees for lawn mowing, property inspections, and other services. Countrywide used subsidiaries to hire the vendors, and the subsidiaries allegedly marked up the price for the service. The FTC alleges the markup was often 100% or more. The FTC alleges Countrywide was trying to increase profits in bad economic times.

Also, in servicing loans for borrowers trying to save their homes in Chapter 13 bankruptcy proceedings, the FTC alleged that Countrywide made false or unsupported claims to borrowers about amounts owed or the status of their loans, and added fees and escrow charges to their mortgage accounts without notice.

If you get a check, you need to cash it by September 19, 2011. The checks will vary from less than $500 to several thousand dollars. If you have moved since then, click here for information to contact the administrator of the program.

 

Fees to swipe a debit card don’t drop as low as expected – what this means for consumers

Many retailers expected the Federal Reserve would support their interests today and significantly drop the fees associated with debit card transactions. However, the drop was less than expected, and it has some business groups outraged.

Everytime a debit card is swiped, the retailer pays an interchange fee to the payment network. The Federal Reserve passed a new rule that caps the interchange fee at 21-cents per transaction. The original proposal last December was a 12-cent cap.

The higher than expected cap surprised groups including the Merchant Payments Coalition who added that the  Federal Reserve made significant concessions for banks. The law’s intention was to create a fee cap that was reasonable and proportional to the costs issuers incur for every debit card transaction. The problem is the bankers and retailers are very far apart in describing what’s reasonable and proportional.

“The Federal Reserve very clearly did not follow through on the intent of the law,” said Mallory Duncan, Chairman of the Merchants Payments Coalition. “This rule is unacceptable to Main street merchants and consumers, who were counting on the Fed to issue a fair rule that followed Congress’ law. Unfortunately, this rule does not meet those qualifications.”

The Merchant Payments Coalition which represents about 2.7 million grocery, gas, drug store, online businesses, and other retailers is now looking at its legal options.

Will this help or hurt consumers?
There’s been a lot of controversy over this issue. Businesses said the 12-cent cap would mean they could pass savings on to consumers, while banks said consumers would see higher prices for banking if they lost a valuable revenue stream.

The American Bankers Association was critical of the original proposal to drop fees by 70%, but today commended the Federal Reserve for recognizing that banks rely on these fees to cover fraud losses, network fees, fixed costs, and fraud prevention. The ABA says while the cap is not as significant as originally proposed, consumers will still feel the impact.

“The final rule still represents a 45 percent loss in revenue that banks use to provide low-cost accounts to our customers, fight fraud and maintain our efficient U.S. payments system.  This remains a real concern to banks everywhere and the consumers and communities they serve.  Consumers will still feel the impact of this direct transfer of costs from big box retailers to everyday Americans.  Consumers will see higher fees for basic banking services, and banks – particularly community banks – will still feel the revenue pressures that this rule will cause,” said Frank Keating, ABA president and CEO.

The ABA went on to say they’ll be watching retailers. “We will also watch to see whether retailers reward customers with lower prices from their billion dollar windfall or simply pocket the money.”

While 21-cents is generally the cap, there will be an additional fee that can be added based on the transaction amount. That percentage fee is expected to add another penny or two to the fee. Plus, there’s a 1-cent fee that can be added if the issuer develops and implements fraud-prevention standards. It’s expected most fees will average about 24-cents per transaction.

It will be interesting to watch this issue develop over the next several months, as it seems both sides are still worlds apart on their views of this issue. The rule was supposed to take effect in July, but the effective date was pushed back to October 1, 2011.

There will also be an exemption to these limits for issuers with assets less than $10 billion.

Airlines collect $5.7 billion in baggage and reservation change fees

Unlike most things in life, once you book an airline ticket you’re stuck with it unless you want to pay big bucks to change the reservation. Most airlines don’t make it an easy decision as it’s sometimes cheaper to just book a one way ticket to change your flight. All those fees add up for the airlines. Between reservation changes and baggage fees, airlines collected $5.7 billion in fees in 2010.

Delta stood out from the crowd collecting more than $470-thousand dollars more in 2010 than 2009 in just baggage fees. American came in second but made far less money — just over $105-thousand dollars in baggage fees.

I refuse to pay those fees and couldn’t tell you the last time I checked baggage. Luggage alone would easily add $100 to a family’s tab if they were to take a trip. Think of all the stuff you need to pack for young kids.

Click here to see how much your favorite airline collected in reservation cancellation and change fees

 

 

Click here to see how much your favorite airline collected in baggage fees

Delta allows you to track your checked bag

Baggage claim at the baltimore airport Source:...

Image via Wikipedia

Anytime I check luggage at the airport, I wonder if I’ll ever see it again.  Even with fewer people checking bags because of the fees, you still worry that a checked bag will get lost and never make it to your destination.  According to the latest government data, your chance of a damaged, lost, or delayed baggage are highest on American Eagle Airlines, and least likely on Air Tran Airways.

Losing your baggage is a big hassle and really impacts your vacation especially if it’s on a cruise which happened to me several years ago.  Not knowing where your luggage is located and when or if it will arrive is one of the worst things.

Now, one airline is helping ease your mind with a system that lets you track your luggage as it makes its way on and off planes and through the airport systems.

If you fly and check bags on Delta, your luggage will be treated like a trackable piece of mail. You can track the bag by your last name and bag tag number. If you don’t have a smartphone, there will be self-service kiosks at 18 of Delta’s busiest airports.   You’ll be able to see where your bag is, the carousel it will arrive on, and file a claim if it’s damaged or doesn’t arrive.

If your bag is delayed for more than 12 hours, Delta says it will give you a $25 transportation credit voucher. You’ll get $50 for two checked bags.  It’s unclear if the credit voucher will be on top of the baggage fee you paid. Starting in August, new government rules will kick in that require airlines reimburse the checked baggage fee for misplaced bags.

It’s good to see luggage is finally getting some attention. For years, it’s been an after-thought. Our focus has been on all the other issues associated with air travel. Now, if you’re going to pay for the checked baggage service at least you know you’ll get your money back if the service is not up to par.

Best Buy removes restocking fees

Black Friday shoppers rush into Best Buy

The holiday return season will swing into high gear on December 26th. This year, consumers are getting an early Christmas present from Best Buy as they get rid of their restocking fees for almost all purchases.

A simple statement on their website explains the big policy change. The change took effect December 18th and eliminates restocking fees for all orders except special orders.

The website statement reads, “Best Buy continually listens to our customers, and they told us they want to give confidently this holiday season and every other day of the year — and with that comes easier returns. Effective Saturday, December 18, Best Buy is improving its return policy by removing restocking fees for all products except special orders. Customers can visit BestBuy.com for further information.”

As a consumer advocate, this is a big win for consumers. Consumers often pay these restocking fees for no reason. It will be interesting to see if other stores follow in the footsteps of the electronics giant.