Monday, June 18, 2007

Just in case I'd forgotten about the necessity of that emergency fund

Anyone with an interest in the media landscape has probably seen the headlines about what a dire economic state the journalism industry is in.

Virtually every major newspaper has undergone drastic layoffs, longstanding chains are being sold and dismantled, and even the industry's pinnacles are under assault. A few years ago, most people would probably agree that the top four papers in the country were the New York Times, the Washington Post, the Wall Street Journal, and the LA Times. Since then, the Washington Post has been dinged (though not decimated) by downsizing, the LA Times has had its highly regarded top editorial management tossed out so the Tribune Company can have freer reign with its cost-cutting, and the WSJ is widely viewed as likely to be sold, either to Murdoch or whatever white knight can be found to keep it out of his hands.

Those white knights don't tend to work out too well. It's deeply sad to look at how many names in the newspaper industry, names that once represented great journalistic franchises, now stand for cautionary tales. The Philadelphia Inquirer. The Star-Tribune. The Baltimore Sun. The Santa Barbara News-Press. Reading Romenesko (the venerable blog tracking media-industry news) these days is like flipping through the obits.

And last week, I got a reminder that my little pocket of the media world isn't as immune as I'd thought. My magazine's parent company implemented a big restructuring. The dust settled with half my magazine's staff laid off, with the brunt of the cuts falling on our most senior and most experienced staff.

I'm still employed, but my job and daily work environment are a whole lot different than they were a week ago. It was also a reminder that mine is not a career to grow old in. Journalism eats its elders; skill and acclaim are no protection. One you've been around long enough to command a significant salary, you basically have a target painted on your forehead.

Which means I'd really better step up those savings. My only protection against catastrophe down the road is having enough savings so that my financial infrastructure isn't dependent on paychecks from a career that could easily collapse.

Wednesday, June 13, 2007

Auditioning new banks, part 2

Here's the list of what I've looked at and why I've scratched them off my list. Banks in italics are still in the running. WaMu has the lead right now.

(Sorry for the lag; the last entry wasn't meant to be a cliffhanger. Once again, travel had me brainfried and distracted.)

But first, a word of griping -- why do banks make their terms so damn hard to excavate? I mean, yes, I realize displaying all the fees you try to gouge out right up front is not a good sales tactic, but it's absurd that I can't find all the fine print on some sites after an hour of digging around. GRR.

  • Bank of America: Charges fees for using outside ATMs

  • Citibank: Charges fees for using outside ATMs

  • Chase: Charges fees for using outside ATMs

  • Charles Schwab Bank Investor Checking: Online banks don't make me nervous. However, investor-focused banks do make me nervous, since I'm very much not the target audience. I don't have and don't ever plan to have a brokerage account. (Any savings I eventually accumulate will have to live in money market accounts, CDs or, at the most adventurous, mutual funds. Among many other considerations, I'm a business journalist, and it's a deeply bad idea for business journalists to own stock.)

    On the other hand, Charles Schwab appears to be offering an insanely good deal: No monthly service fees, free online bill pay, free ATM use, and unlimited ATM fee rebates. That last term sounds so absurdly good I don't expect it to last long, but it'd be fun while it did.

    And, woah, I just clicked on their Bill Pay demo -- it looks like the interface is the same as NetBank's! I suppose I shouldn't be shocked; banking system software seems like a sensible thing for financial services providers to acquire from a third-party, which can sell it off to multiple places. But hmm, it would be nice to stick with a UI I already know and like.

    So, is anyone using Schwab? Is there any sticking point I'm missing? (Schwab is one of the worst offenders in the burying-the-fine-print camp -- their site doesn't offer much in the way of details. After much prying, I finally found their Schwab Bank Deposit Account Agreement, dated Sept. 2006, which I hope makes it current.) How do they handle overdraft? The Bank Deposit Account Agreement booklet makes reference to various things, including an Overdraft Credit Line, which is one of the things on my "would be nice" list.

  • Commerce Bank: Is it bad of me to cross Commerce off my list solely because their website looks so 1999?

  • EverBank: This is the bank that bought NetBank and will automatically inherit my account sometime this summer if I don't move it. Staying put would be the path of least resistance, and EverBank gets good reviews and has no ATM surcharges -- it even reimburses up to $6 per month. However. It charges a $4.95 monthly fee to use online bill pay if your average daily balance dips below $1,500, and as mentioned in my last post, no monthly fees is one of my sticking points. So it gets crossed off my list.

  • ING Direct Electric Orange: ING gets bonus points for having the clearest disclosures I could find. Its FAQ is impressively detailed and forthright about detailing exactly what potential changes you could incur. It also clearly offers no-fee overdraft protection. However, it's off my list because it doesn't easily support paper check writing, and paper checks are still how I pay rent each month.

  • TD Banknorth: Like Schwab, TD Banknorth appears to have crazy good terms -- its SimplyFree Checking says it has no minimum balance requirements, no monthly fees, free bill pay, and an ATM card that not only has no outside charges, it reimburses bank fees. Hmm. Anyone use them? Any catches?

  • UmbrellaBank: Also reimburses ATM charges, up to $7.50 per statement cycle. It also has overdraft protection, one of my "would be nice" features. A definite possibility. The no-monthly-fee option is only available with recurring direct deposit, but that clause isn't a problem for me.

  • Wachovia: Endorsed by my sister, but charges fees for using outside ATMs, so off my list it goes.

  • WaMu: This is what I'm leaning toward. WaMu has ATMs near my apartment and my office, and it would be a novel and fun thing for me to actually have a local bank with local branches. Their free checking has no minimum balance and free online bill pay.

    The big question: Does WaMu charge for withdrawals from rival ATMs? Once again, their website totally fails to clearly address the issue. It loudly advertises "Free ATM cash withdrawals worldwide," with the fine-print clarification, "WaMu will not charge ATM fees for cash withdrawals, but non-refundable ATM operator fees and foreign currency exchange and transaction fees may apply."

    "WaMu will not charge ATM fees for cash withdrawals" implies that they, like, won't charge, but it also could have the unspoken coda "at our ATMs" -- and I can't find the finer fine print anywhere on their site. Kim and Catherine, two local friends, left comments on my earlier entry implying that they do get charged for outside ATM use.

    However, WaMu launched its Free Checking campaign last year, and it looks those terms began being offered for accounts opened after 3/06. So, it's seeming likely that anyone who opens an account after that date does indeed have free use of rival ATMs -- but WaMu might not have retroactively applied that to previously opened accounts.

    WaMu offers one NSF fund fee waiver each year; I can't tell if they offer overdraft lines of credit. But if the free ATM use thing pans out, I'm leaning the WaMu way.

So, it looks like the remaining contenders are Charles Schwab, TD Banknorth, Umbrella Bank and WaMu. Anyone had good or bad reports? Anything I should consider and missed, or fine-print nastiness I've missed with the contenders?

Friday, June 08, 2007

Auditioning new banks, part 1

Why is NYC banking so especially heinous?

When I went looking for a local bank back in 2001, I really couldn't find anything without a monthly fee for dipping below a set minimum. Things aren't quite that dire now -- 'free' checking is catching on, and I have a few local options -- but it's also pretty clear that banks operate here differently than they do in other places, even when they're national chains.

For example, check out Citibank's EZ checking. One of its features is "Five free uses of non-Citibank ATMs." But there's a little asterisks next to that, and the fine print notes, "Applies in all markets but CA, NV and the NYC area where it's $1.50 per withdrawal."

Why? Why is NYC different? Is it simply that the competitive landscape here lets banks get away with higher fees, or is there something strange in our local banking regulations?

(And yes, as the financial reporter, I should be the one answering that question. I'll get on it, but figured I would first throw it out there and see if anyone has any insight.)

I haven't picked a new bank account yet. I've been swamped this week and have only now started doing a serious comparison. (For those who missed it, see last week's post about how my beloved NetBank is going away.)

I've gotten a lot of suggestions in the comments. To keep things straight, and potentially help others in a similar situation, I'm going to list out the banks I've considered -- and why I've crossed them off the list.

First, a recap of what I'm looking for.

Things I consider non-negotiable

  • No minimum balance required to avoid monthly fees
  • Good online account management tools
  • No-fee online bill pay
  • No fees for writing paper checks
  • NO FEES FOR USING OUTSIDE ATMs. This is something of a financial moral issue for me. I wish the charges were lower, but I don't get irate about ATM operators charging fees for non-customers using their ATMs. They're proving me a service; I'm willing to pay for it. I get furious, though, about banks charging their own customers fees for using ATMs other than theirs. That's just coercive, punitive and monopolistic.

    This is not a financially rational position for me to be a hardliner about. I probably spend $10-$15 in an average month on upfront ATM fees -- the $1.50-$2 per-transaction I get charged by the ATM operators for using their machines. (I pay nothing on the back-end. NetBank doesn't charge for using ATMs outside its network.) I could spend less by getting a bank with good ATM coverage and using its ATMs religiously.

    But. I have this fiscally irrational objection to paying routine monthly fees, or paying my bank for using another bank's ATM. In exchange for avoiding those fees, I'm willing to pay more actual cash money in upfront ATM usage fees.

    I don't pretend this is sane. However. It's something I am surprised to find myself caring about very strongly, so I'm sticking to my guns on it.

Things I would really like

  • Overdraft line of credit. With NetBank, I have an overdraft credit line. If I overdraft, it transfers money from the credit line. There is no NSF charge or overdraft fee -- all I pay is interest on the funds that get transferred over. This is awesome. I try not to bounce checks, of course, but it's a very nice protection to have.
  • Good options for a money market account with the same bank. I want to open one this year, once I, er, amass some savings. For that, I will care about interest rates.

Things I don't care about

  • Interest. 0% is fine by me.
  • ATM network coverage. It would be nifty to have ATMs around where I can get money with no fees whatsoever. However, that hasn't been the case for me for the past decade. I'm used to the pain of upfront fees and willing to continue paying them.

This is getting hugely long, so I'll continue it in the next post.