A new study from Bankrate revealed that fee-paying checking account holders rack up an average of $288 annually, with nearly half believing this prevents them from preparing for a potential recession.
01/18/2023 3:40 P.M.
2 minute read
A recent survey from Bankrate indicated that monthly fees are holding Americans back on recession preparations and financial milestones.
According to the report, more than 1 in 4 Americans with a checking account (27%) incur monthly fees and expenses such as overdraft fees and ordinary ATM service charges, despite the fact that many banks in the market don’t charge for those services.
Additionally, fee-paying checking account holders rack up an average of $24 per month or $288 annually, according to the study. Nearly half (48%) believe those checking account fees are preventing them from preparing for a recession, restricting how much they can save for emergencies and pay off debt, as the likelihood of a downturn rises and hiring is set to stall this year.
“Avoiding unnecessary fees is part of the recipe for financial success,” said Mark Hamrick, senior economic analyst at Bankrate. “Over the coming two decades, assuming the annual rate and level of savings doesn’t change—which it will—one would have another $5,760 to work with.”
Other key takeaways from the study include:
- Americans would pay down debt (30%), add to their emergency fund (29%), fund discretionary purchases (27%) or save for a major financial goal (26%) if they didn’t have to pay monthly checking fees.
- Nearly 1 in 3 (31%) of checking account holders who pay monthly fees say the reason they’ve remained with their financial institution is unrelated to the products or services it provides.
- Almost two-fifths of Americans with a checking account (37%) say low or no monthly fees are the most important feature in a bank.
“In a perfect world, we’d all be born with knowhow or have parents or other mentors who’d help us to be wise and effective financial stewards on the first day we have funds with which to work,” Hamrick said. “For some, it may require knowledge born of experience or exposure to new information, including that no or low-fee accounts are readily available, particularly in this age of online, including mobile access, banking.”
Bankrate carried out the online study that surveyed 3,657 U.S. adults, of which 3,069 have a checking account, from Dec. 7-12, 2022.
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