Online banks are ready to take advantage of customers fed up with increased fees from big banks, according to MSNBC.
Banks such as PerkStreet Financial saw twice as many new customers sign up Friday, days after Bank of America announced they would charge $5 for using debit cards.
"The Bank of America news woke everyone up and spurred change," said Perk Street's CEO Dan O'Malley in a phone interview to MSNBC.
PerkStreet is one of many online-only banks marketing to customers who are escaping the numerous set of fees imposed by traditional big banks.
The traditional banks are following Bank of America’s decision and raising fees and requirements for free checking.
For instance, the San Francisco Chronicle reports that while Citibank won’t charge for debit cards, it will impose changes to its free checking from Dec. 9. Customers who don’t meet the stiffer requirements for free checking will have higher fees.
In contrast, PerkStreet’s free checking account only requires a $25 minimum deposit and gives its customers rewards through its debit card, including free coffee, music or cash. Other banks such as Ally Bank and ING Direct have customers earning variable interest rates based on monthly balance without the fees.
Traditional banks have argued that new consumer protection laws, including laws forbidding them to automatically enroll customers into overdraft protection plans and charging a certain amount for debit card transaction fees, are forcing them to impose hikes in order to recoup lost revenue.
Despite the flurry of fees imposed by banks, online-only banks also face problems, including the lack of actual branches, dealing with customer service and how to process paper checks.
