Study Finds Younger Generations Paying More in Monthly Banking Fees than Older Generations
A recent Bankrate survey found that Gen Z and millennial account holders pay on average more than three times as much in monthly bank fees than older generations. Checking account holders pay an average of $8 per month, and while Gen X pays about $4 and baby boomers pay about $2, Gen Z pays about $19 and millennials pay about $16 per month.
“These are some of the same individuals who are earliest in their career paths, striving to achieve their broader financial goals,” said Mark Hamrick, Bankrate’s senior economic analyst. “By shifting some focus to try to avoid or reduce these costs, they should get a good return on that investment of time.”
Gen Z and millennial account holders are more likely to pay monthly fees than older generations too; 47 percent of Gen Z and 35 percent of millennials pay monthly fees, while 19 percent of Gen X and 15 percent of baby boomers pay monthly fees. However, most Americans use free or low-cost checking accounts, with 76 percent paying no monthly fees and 85 percent paying less than $5 a month.
CBS News noted that big U.S. banks have benefited greatly from overdraft, ATM, and other fees, generating $9 billion in annual revenue in recent years.
Although consumers can switch banks to avoid fees, 32 percent of account holders have stayed with their bank or credit union for convenience, stating that it can be too much of a hassle to switch or that it’s the account they’ve always had.
Federal lawmakers, including Senator Elizabeth Warren (D-Mass.), are urging banks to eliminate overdraft and other monthly fees, arguing that the charges primarily affect low-income households and Black households. In the past year, banks like Capital One, Ally Bank, Alliant, and Discover have moved to eliminate overdraft fees.