Higher bank fees? Ways to skirt them in year ahead

NEW YORK — Consider the $5 debit card fee a mere warning shot.

When Bank of America announced its plan to start charging customers for debit card purchases, it was a wake-up call that banks are hunting for ways to boost profits.

The public outcry over the fee ultimately caused Bank of America and some of its competitors to abandon their plans. But that doesn't mean the industry is done tinkering with checking accounts, which have already been significantly revamped in the past year.

"The market at the moment is very experimental," says Bob Meara, a banking analyst with the consulting firm Celent. "The standard checking account now comes with many options, which consumers would be well advised to examine if they want to avoid fees."

The changes come as new regulations sharply limit how much banks can make from checking accounts. And the stakes are high. A regulation that took effect in October caps how much banks can collect from retailers whenever customers swipe their debit cards, curtailing some $16 million in annual revenue, according to the Federal Reserve.

Banks aren't about to simply surrender those profits. That means you'll need to be more vigilant about avoiding fees.

Here's what to watch:

Monthly Fees

Monthly fees are undoubtedly rising: Bank of America, Chase and Citibank all hiked basic checking account fees this year. The good news is that banks are still giving customers ways to get around those fees.

In fact, 92 percent of checking accounts waive fees for customers that meet certain conditions, such as setting up direct deposit. That's up from 88 percent a year ago, according Bankrate.com. So if you're paying a monthly fee, call your bank to see if another account might better suit your needs.

For instance, you may have previously opted for premier checking to earn interest on your account. But premier accounts require higher minimum balances of $10,000 or more to avoid monthly fees.

If your balance falls short even once or twice a year, a $25 monthly fee could quickly negate any minimal interest earned. The other perks that accompany premier checking accounts — such as waivers for out-of-network ATM fees — may not make up for those monthly fees either.