Survey: Consumers Hit Financially by the Pandemic Paid Higher Credit Union/Bank Fees

Consumers who suffered cuts in their income because of the pandemic also paid higher credit union and bank checking account fees, according to a new Bankrate.com survey.

The survey of 2,339 checking account holders also found that more than 60% of them changed their payment practices to using online methods more frequently during the coronavirus crisis.

Those hit financially saw average monthly charges of $11.41 to their checking accounts, which included ATM fees and overdraft expenses. For those whose income was not affected by COVID-19, their average monthly checking account charges amounted to $2.79, the Bankrate.com survey showed.

“Those whose personal finances have been adversely affected by the pandemic have been hit with a double whammy of higher banking fees,” Bankrate.com Senior Economic Analyst Mark Hamrick said in a prepared statement. “Unemployment or loss of income can be devastating, but one should try to avoid adding financial insult to injury by paying too much in banking fees when so many less expensive options abound.”

Overall, the average U.S. checking account holder reported paying less than $8 in fees, including routine service charges, ATM fees and overdraft penalties. A sizeable majority of checking account holders (72%) reported paying nothing in monthly fees, while nearly four in five (79%) said they were paying $5 per month or less.

In addition to those whose household income declined during the pandemic, those paying more in bank fees tended to be Black, Hispanic and younger. These are the same groups that have suffered higher rates of unemployment and loss of income during the economic downturn this year because of the coronavirus crisis.

While white checking account holders reported paying a below average of $5 per month in fees, Blacks and Hispanics paid more than twice as much ($12 and $14 per month respectively). Additionally, white checking account holders were much more likely to say that they paid nothing in monthly fees compared to Blacks and Hispanics (79% compared to 56% and 50%, respectively), according to the Bankrate.com survey.

Moreover, millennial checking account holders (ages 24-39) reported paying $15 per month in fees compared to $6 for Gen X (ages 40-55) and just $2 for baby boomers (ages 56-74).

During the pandemic, 64% of checking account holders reported that they have adjusted their payments to online options more frequently.

Nearly half (45%) said they have paid bills online more often, 25% have made more deposits with a smartphone app, and 23% have used peer-to-peer payment methods such as Venmo or Zelle more often. Additionally, 21% said they have increased use of contactless payment methods like Apple Pay or Google Pay.

Although many checking account consumers have shifted to mobile/online banking, the tendency to stay with the same financial institution over time has remained. The average account holder has been with the same bank or credit union for 14 years, according to the survey.