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People of color pay more than twice the amount of bank fees than white Americans, a Bankrate poll found.
When asked about fees such as ATMs, overdrafts and routine service fees, black adults report spending an average of $ 12 a month on checking accounts at banks or credit unions, and Hispanics pay an average of $ 14 a month. month. Holders of white checking accounts said they pay an average of $ 5 a month, according to a survey conducted by YouGov. It surveyed 2,743 American adults, of whom 2,339 had checking accounts between December 7-10, 2020.
Whites were also more likely to have tax-free accounts, with 79% saying they did not pay taxes. In comparison, 56% of blacks and 50% of Hispanics did not have monthly taxes.
Americans who saw their incomes negatively affected by the coronavirus pandemic also reported paying more taxes than those who were not financially affected by the crisis. Those who had an obstacle had a monthly average of $ 11 in fees, compared to less than $ 3 a month for those who were not affected, the survey found.
“There has been an exacerbation of wealth and income inequality during this time,” said Markrate, Bankrate’s chief economic analyst.
“More than any other recession we are aware of in our history, this has indeed been a reflection of an economy that has and does not have.”
When it comes to routine service fees, many banks require a minimum balance to avoid commission. On average, customers need to have about $ 594 in their account to waive the fee, a October 2020 study from Bankrate found.
The availability of ATMs also matters. If you use one outside your bank network, you will be charged a surcharge from the ATM owner, plus a fee from your bank. Additional fees, on average, cost non-customers an average of $ 3.08, and your bank will charge you an average of $ 1.56 to use someone else’s ATM, Bankrate found.
Those who exceed their account face an average fee of $ 33.47.
For minority communities, the disparity in bank fees indicates the inequality they have faced for years, suggested John Holdsclaw IV, chairman of the board of the Coalition of Community Development Financial Institutions. CDFIs are credit unions, banks, microcredit funds or venture capital providers that provide low-income communities with access to financial services.
The wealth gap is evident, according to the Federal Reserve in the 2019 Consumer Finance Survey, published in September 2020. The average wealth for a white family was $ 188,200, compared to $ 24,100 for black families and $ 36,100 for Hispanic families. .
The extra bank charges “only make matters worse and affect blacks and browns and minority families across the country more,” Holdsclaw said.
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He believes in many situations that higher bank fees can be concentrated geographically in areas with black, brown and moderate-income communities.
“It just creates a perfect storm,” Holdsclaw said.
“The perfect storm is behind the communities of these minorities and the minority families who have their accounts with these financial institutions.”
How to reduce your taxes
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It’s worth taking a walk to reduce your taxes, Hamrick said.
Look not only at traditional banks, but also at credit unions and online institutions. Digital technology opens up options beyond what is physically nearby.
“Shopping for the best banking services may not have the same level of enthusiasm associated with it, say, buying a new outfit, an electronic device or a car,” he said. “But its failure can make the difference between achieving our financial goals or not.”
Some banks offer accounts with no monthly fees and no minimum balance required. CNBC Select named Capital One 360 Checking Account as the best global tax-free account, with Ally Interest Checking Account as a finalist.
The best way to avoid ATM fees is to use one in your bank’s network. Credit unions and smaller banks tend to have multiple ATM networks available to customers free of charge, according to Bankrate. Online banks may also have national networks that can increase the number of ATMs available free of charge. Some also offer a refund for out-of-network provider fees.
If you still can’t find a toll-free ATM, consider getting your money back when using your debit card to make a purchase.
CDFIs are a good option for minority communities, Holdsclaw said. There are more than 1,100 across the country, with total assets of $ 211 billion. Some are banks and some are credit unions.
Although fees will vary from institution to institution, they will generally not be high, he said.
“It is embodied in the missions of these financial institutions that they will not charge huge taxes for people who are already in a low- and moderate-income community,” Holdsclaw said.
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