Citibank to Increase Checking Fees

Customers must keep $1500 balance

By AMANDA RAUS

Updated 7:06 AM EST, Thu, Nov 12, 2009

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Citibank is changing it's checking policy and many Connecticut customers aren't happy.

Starting in February EZ or Access checking accounts will be charged $7.50 a month unless they maintain a $1500 balance. The monthly fee used to be waived if customers set up direct deposit for paychecks--or had two automatic bill pays.

"When I opened this account they told me it was going to be free. Then what happens a month later? I get charged about $7," said Moussa Gueye of New Haven.

While $7.50 doesn't seem like a large sum of money, it does add up. In fact, if you have to pay that fee the entire year, you're shelling out $90. In economic times like these, account holders say that's a lot.

"Times are very tough right now," said Gueye.

"I'm not working, so it would impact me," said Veronica Benson of New Haven.

Citibank isn't the first to raise fees. In June, Bank of America raised its monthly fee by $3. Lawmakers are worried this is just the tip of the iceberg and that too many banks are raising fees, whether it's for an account or a credit card.

In fact, 54 percent of banks have already increased or are planning to increase the credit card APR on their good customers, and 74 percent of banks will do the same for customers with poor credit.

Forty percent of banks will or have increased annual fees.

Just over half of all banks have cut or will cut the credit limits for their credit card customers.

President Obama signed a law that would prevent the credit card companies from raising interest rates on existing balances. That law is supposed to be implemented in February, but Connecticut Senator Chris Dodd is working to have that law implemented next month.