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Many banks charge account closing fees of $25 to $50 when a customer wants to withdraw their money and stop using their services. I'm not sure if these fees are even enforceable, but I would like to ask others for their insight on what usually happens with them.

Do their payment affect an individual's credit score? Do banks usually take legal action or place a lien against a customer who doesn't pay the fee? Or are these small fees usually waived and forgotten if the initial scare and shock tactic fails to elicit an immediate payment?

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    I don't believe I have ever been charged a closing fee when I've closed accounts.
    – Michael Richardson
    Dec 15, 2022 at 13:56
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    Eventually, they send this guy after you.
    – Paul D. Waite
    Dec 15, 2022 at 14:48
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    then they don't close your account... and since it's below the minimum balance (or more probably negative my now) they keep charging you more fees because of that..
    – Andy
    Dec 15, 2022 at 16:08
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    General remark, if you want to stop using the banks services, 'closing the account' is not the important thing to do. What you need to do is revoke the permission of the bank to make payments in and out of the account in your name. If you don't do that, a 'closed account' will just be reopened the moment someone tries to make a transfer to or from that account (someone includes things like autopayments you set up yourself).
    – quarague
    Dec 16, 2022 at 9:30
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    This should be spelled out in the contract you signed with the bank when opening the accout. I learned about it from money.stackexchange.com/questions/152627/… this question.
    – quarague
    Dec 17, 2022 at 6:31

3 Answers 3

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I left it as the comment on the other answer, but you asked it as a separate answer, so I'll elaborate.

First of all, the other answer is correct in a sense that it is very unlikely that the bank would pursue legal action over $25 of unpaid fees.

But they can still hurt you. Similar to credit accounts, there's consumer reporting agencies for deposit accounts. ChexSystems is one such agency. Accounts in bad standing get reported there, and other banks can see your negative banking history. In this situation, you'll close the account without paying the fee, so the bank will assess the fee and you'll end up with closed account with negative balance. It would then get reported to ChexSystems, and any time you try to open a new account - the new bank would see it and might refuse service to you.

The negative history on deposit accounts is kept for 5 years.

I've seen that actually happen to someone I know (that's how I even know about this - most people don't). In that case though that person had overdrawn the account and abandoned it, stopped using it. The bank closed the account and reported it, and that person got stuck without being able to open any new bank accounts for a while until that was sorted out (they eventually went back to that bank, paid off the balance + fees, and the bank removed the negative mark).

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  • Out of interest, couldn't they sell that debt, and let a debt collector go after you. A debt collector may send you a letter, and then threaten extra penalties, and then impose extra penalties and recovery fees, up util a point where the debt is worth recovering?
    – Gregory Currie
    Dec 16, 2022 at 9:28
  • @GregoryCurrie maybe, I doubt they'd do that for $25, though. In the case of that person I knew that didn't happen, blocking the ability to bank was incentive enough for the person to pay off the debt entirely and the bank didn't have to sell it to debt collectors or do anything else (selling to debt collectors is usually at a steep discount).
    – littleadv
    Dec 16, 2022 at 18:02
  • I'm sort of imaging a situation at the end of the month, the bank takes all the little debts it can't be bothered chasing, packages them up, and yeah, sells at a discount. I sort of agree, because it's not really worth it, and if there is a dispute, can take more energy and effort getting to the bottom of it than resolving it.
    – Gregory Currie
    Dec 17, 2022 at 2:54
  • @GregoryCurrie: A $25 debt sells to a collector for something like $2.50. Not worth the paperwork.
    – R.. GitHub STOP HELPING ICE
    Dec 17, 2022 at 14:49
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I'd think the bank could easily enforce the fee by deducting it before paying out the balance in the account. Like if they say there's a $25 closing fee and you have a balance of $100 and you say you want to close the account, they're not going to give you $100 and then ask you to give $25 back. They're just going to give you the net $75.

If you didn't have $25 in the account ... If you signed a contract where you agreed to a $25 closing fee I would think it would be legally enforceable, absent some law specifically forbidding such fees. I guess how far they go to collect would be up to the bank. I doubt they would take you to court over it. Are they going to pay a lawyer $200 an hour to fight in court over $25?

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    They're going to report a negative balance account in ChexSystems and prevent you from opening any new accounts or effectively banking elsewhere.
    – littleadv
    Dec 15, 2022 at 5:08
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    @littleadv Would you mind posting an answer? First time I ever heard of ChexSystems.
    – AlanSTACK
    Dec 15, 2022 at 5:12
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    If you want to not pay the $25 why not just withdraw the full $100 before telling them you're closing it? The first paragraph seems trivially wrong.
    – Jack Aidley
    Dec 15, 2022 at 15:41
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Last year, I abandoned a 15 year old "free" account at a Texas savings and loan. To close it, they said that I must meet with an S&L officer at one of their branches. Too much trouble. I took out all of the money allowed, leaving $5.00 with them. ...forever!

They still send me monthly statements and car-loan types of advertisements, but they won't be seeing me again, ever.

No repercussions... but, then, it was a "no-fees" account.

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  • Wouldn't this start to affect your credit score if the banking institution starts to charge a fee for the formerly "no-fees" account?
    – Flux
    Dec 17, 2022 at 14:02

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