Bad Bank

Stricter rules governing how much banks can charge for overdraft and credit card swipe fees have eaten into the profits of big banks, but they have an answer: raise the bank fees their customers pay.

Banks blame increased regulations that limit fees and other charges for wiping out an estimated $12 billion in yearly income. Now it costs banks between $200 and $300 a year to maintain a retail checking account, but they only take in about $85 to $115 in fees per account per year.

In fact, more than half of all checking accounts are unprofitable for banks, according to a study released in 2010 by consulting group Marsh & McLennan Cos. Inc. (NYSE: MMC).

Banks also have lost money on cash they're holding due to few investing or lending options, depriving them of as much as $8 billion in income.

Banks have had to become more creative in finding ways to compensate for their lost income. Free checking is increasingly more difficult to find, and a slew of other bank fees have been added.

"Banks are closely examining what costs they can eliminate and where they might be able to charge, and what the market will bear and not drive customers away," Beth Robertson, director of payments research for Javelin Strategy & Research in California told Consumer Reports.

Avoiding these myriad new bank fees is difficult, if not impossible, for most consumers.

Fees are "rising across the board," Richard Barrington of MoneyRates.com told Marketplace Economy. "And the least you'll need to keep in your account to get free checking has jumped, on average, by more than 800 bucks."

Barrington said that in addition to the growing bank fees, the average balance requirement has jumped to $4,400 -- far more than most people keep in their checking accounts.