Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective

Archive for May, 2009

ING Bus Advert

Creative Commons License photo figure credit: CarbonNYC

This week I received a letter from EverBank, which is where our checking, money market, and some CD accounts are held.  We’ve banked with EverBank for a while now and have been happy with its services.  Until now.  The letter that I received indicated that EverBank will now start charging $8.95 for BillPay, which used to be free.  The catch is that it’s free if our account balance (daily average) stays above $5,000 for the month.  The letter also indicated that an account maintenance fee of $8.95 will also apply to any money market accounts with daily average balances below $5,000.

I wrote previously about how bank fees are for poor people.  It seems that the definition of poor just broadened, at least according to my previous assessment.

We generally keep an average balance in our money market account of over $10,000, and previously we had been keeping a $1,500 balance or more in our checking account.  What this new fee means is that in order to keep BillPay free, we’ve got to forgo some increased interest rate on an additional $3,500 monthly.  Because of dismally low interest rates, the lost interest on that $3,500 amounts to just $1.87 per month.  But if when interest rates go back to where they were 2 years ago, this difference rises past $10 per month.

It looks to me like we have two options here: we can increase our balance in our checking account to meet the new minimum requirement — effectively costing us $1.87 per month at this point, or we can find a new bank to take care of our BillPay services.  I did some investigating for the latter option.  Rather than having to open a new bank account somewhere, I looked at banks where we are already customers.  The most appealing of these was our ING Electric Checking account.  By simply cancelling our BillPay service with EverBank, we will avoid the fee and be left with the ability to write checks on the account.  Our Electric Orange account will take care of paying all of our bills.  Since our EverBank accounts are already linked to our ING accounts, it will be trivial to switch our BillPay services over to ING.  All that will be required will be to replicate our Payee list and set up some automatic monthly transfers.

While $1.87 is not that much money, just over $22 per year, to me it represents a gradual erosion of my wallet.  We already pay so much money monthly for everything that we have.  If we simply accept EVERY $1.87 increase in cost for things, eventually it’s going to add up to a lot of money.  I’m inclined to stand on principle here and close our checking account with EverBank.  On the flip side, if I closed every account at a bank that irritated me somehow, all my money would be under my mattress (it’s not, by the way, so don’t look there…).

What do you think?  How far would you go to avoid a small fee?  What size fee is too big of a fee for you?