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Banks raise checking account fees

NEW YORK (CBS) - Some of the biggest banks in the country are hiking up their fees and making it more difficult for consumers to avoid paying increased monthly charges for checking accounts.

Bank of America raised their monthly checking account fees 25 percent, but they are not the only bank doing this.

The monthly fee on Bank of America's most popular checking account is now $12, up from $8.95, and starting next month, customers will get charged a $35 fee if they overdraw their accounts.

"If you own a burger joint and someone tells you, you can't charge more than a certain amount for a hamburger, you'd just raise the price on soda and fries. And that's what we're seeing in the banking arena," said Greg McBride with Bankrate.com.

The price hike of basic checking at Chase went from $6 to $12.

"If the government comes in and reduces some of the revenue the business has two choices. Reduce expenses or increase prices and that's partly what we are seeing here," said Nessa Feddis with the American Banking Association.

The banking industry estimates the reduction the new regulations on debit transactions will cost banks somewhere between $14 and $15 billion.

Feddis said accounts cannot be provided for free. There is a cost to providing online services, bill pay, debit cards, ATM, and the income has to come from someplace.

McBride said consumers still have an option.

"Free checking is not going to go away completely," he said. "Smaller community banks, credit unions, and online banks remain fertile ground to find that free checking account."

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