Reading the news lately makes me a little uneasy about the world of debit cards… how can J.P. Morgan Chase and Bank of America justify putting a cap on spending limits at $50 or $100?  Its that even possible to implement?  How would capping our spending even benefit them?  It looks like under the new rules of the Dodd-Frank financial reform, it looks like it is possible for them and others to do this.  This capping of our precious spending limit might be the result of the “interchange fees” that take place every time you swipe your debit and/or credit card at any place of business.  Currently when you swipe your shiny card, your bank charges the retailer approximately $0.44 for the transaction.  With the Dodd-Frank financial reform in place, this would mean that come July of this year those interchange fees would be limited to $0.12 for the transaction.  As such, companies like J.P. Morgan Chase and Bank of America will be losing out on valuable money.  Those companies feel like they in turn how have to charge their customers more for banking to recoup those lost interchange fees with such ideas like the spending cap, small monthly fees to have a debit card and maintenance fees for having a monthly checking account.  What do you think about the changes?  Does it make you want to take all your money out of Bank of America and try a different bank?  If so, here are some suggestions for what to look for in a new bank:

PAY ATTENTION and SHOP around before you even think about signing up for a new bank account! The initiative to set up a new bank account is great, but you will need to do some research to find out what is the best bank to give your hard earned money to before putting your John Hancock on any documents. Without the proper research, it is easy to not pay attention and drain your entire bank account one small fee at a time. Fees can include overdraft charges, maintenance fees, check fees, etc. Your best option is to find a bank that basically has the least amount of fees. Seems simple huh? Finding the right bank for you might not be that simple…

There are three options that I would seek out first: a bank with a brick and mortar building near you for convenience, an internet bank or a credit union. Depending on why you are opening a new bank account will determine which option is best for you.

Location, location, location – if you need a bank and would like to be able to walk up to the ATM and put your money straight into the ATM machine, then look for a locally owned bank. They have the best rates and will charge you the least amount of fees in the long run. In my opinion, I still use a bank that is located in my hometown called Middlesex Savings Bank. This bank is amazing and goes above and beyond with their customer service. My checking account is free – my ATM fees are small (none if within the SUM network) – free online banking and bill pay – etc. Only draw back is that if I need to deposit money into that account, then I need to drive out there, mail them my deposit or move funds electronically. For my purposes, its not a big deal. But for others, it might be a deal breaker. Look for a bank that might be close to where you live or where you work and seek out their rates on new accounts. Also, I’m not ruling out the large banks in every city (the Bank of America, Citizens, TD, etc.), but the smaller, locally owned banks pride themselves on their customer service and their “free” checking accounts.

Prefer to do everything online – ING, Etrade, etc. This is for the internet savvy of us out there. You prefer to do all your banking online and would rather not even have to go to the bank to use the ATM or a teller. You get your paychecks directly deposited into your bank account and disperse the funds as you see necessary. You can even do your banking in your pajamas and no one would ever know! Great banks with positive returns are E*Trade (they return any ATM fees that you were charged – bonus!) and ING. Seek out those rates if you are comfortable with doing everything online.  I personally use E*Trade for my everyday use and ING as my travel account to put aside money monthly to go on vacation!

Credit Unions – you might be thinking, how do I even get into one of these? A credit union is a member-owned, not-for-profit, cooperative financial institution. They can provide the same products and services that you would expect from a traditional bank including surcharge-free ATMs, online financial services, and free savings/checking accounts. The draw of a credit union is that they generally operate as a family of “people helping people” and return the profits to their credit union members by providing better services, better rates, lower fees and special discounts. The money deposited into the credit union is basically pooled together. Some of the credit unions in Boston are the Brookline Municipal Credit Union and University Credit Union.

Whichever bank fits into your life better would be the one to chose to move your money to – in  the long run, we should all be weary of the companies that are charging us small fees periodically because they do add up quickly.