Activity Charge

An activity charge is a fee charged to cover the servicing costs of an account. An activity charge is triggered by an activity or event, and should follow a fee schedule outlined in the account contract. These fees can be based on teller and non-teller activities.

Activity charges can be all-encompassing; for example, a monthly service charge on a checking account may cover a certain number of transactional items. A different account may charge only per-item fees, such as a fee for each check written or each account withdrawal. A very common activity charge is the service charge for an automated teller machine (ATM) withdrawal at a bank other than your own. In the case of ATM withdrawals, account holders may be double charged; they may incur an activity charge from the bank that services the ATM, and a second activity charge from their own bank.

Common activity charges imposed by banks include:

• Monthly maintenance charges for demand deposit accounts;
• Minimum balance charges, which are incurred if the balance in an account falls below a certain minimum threshold;
• Overdraft fees, which are incurred when account holders overdraft their accounts;
• ATM fees;
• Debit card use fees;
• Hard copy statement fees;
• Returned check charges;
• Foreign transaction fees;
• Lost card fees; and
• Account closing fees.

Many consumers seek to avoid paying activity charges as much as possible. For example, many financial institutions, especially small community banks and credit unions, still offer consumers free checking or savings accounts that do not incur monthly maintenance fees. Consumers can also avoid overdraft fees by signing up for overdraft protection; some banks will waive overdraft fees for sufficiently small overdrafts, such as overdrafts of less than $5.

The waiving of activity charges is a way for some banks to stay competitive. For example, in 2011, new federal restrictions placed a 21-cent-per-swipe cap on the amount of money a bank can collect from merchants whose customers used its debit cards to make purchases. Some banks, notably Chase and Wells Fargo, responded to this by implementing a $3 monthly fee for debit card usage by checking account customers. However, many other banks, including Bank of America, refrained from adding a debit card usage fee. Small community banks and credit unions also offer products with fewer or no fees in order to attract more customers.