Big box retailer Walmart is taking on big bank retailers like Chase to nab a profitable demographic: low-income customers who are likely to incur transaction fees when using cards.

On Monday, Walmart and American Express announced the launch of Bluebird, a low-cost checking account alternative that the brands hope will lure some customers away from traditional banks.

Instead of making money off these customers with overdraft fees like banks do, the retail giant and American Express will make money on interchange fees, ATM fees and more broadly through bringing more customers in the door.

"You can now use a retail footprint that has so many more locations than any bank account and effectively substitute that," Amex Group President of Enterprise Growth Dan Schulman said about the new financial service, according to an American Banker report.

Walmart's big move into banking-lite services comes as the cost of a traditional checking account continues to increase for consumers. A checking account today costs an average minimum of $144 per year at a big bank for customers who cannot afford to maintain a minimum monthly balance.

But for low-income customers, the cost of having a checking account can be substantially higher if they routinely bounce payments and incur overdraft fees. Consumer advocates have long criticized the banking industry for these fees.

A new report from Pew Charitable Trusts released on Tuesday underscored just how costly it is for consumers -- and how profitable it is for banks -- to bounce a payment and trigger overdraft penalties.

The report showed that on average, it can cost consumers more than $1,000 in overdraft-related fees if they hit the maximum number of bounced payments in one day, according to Pew.

In some states like Maine, the maximum overdraft amount can be as much as $1,700. In states like Ohio, it can be as low as $525. Pew's data is based on information from the 12 largest banks in the United States; the data did not include community banks or credit unions, which could have lower costs than big banks. The wide variation in price was due to varied representation of big banks in each state, along with differences in pricing from branch to branch.

That wide range of fees on a state-by-state basis underscores an additional issue facing cash-strapped customers: It's impossible to shop around and find the lowest-cost bank account.

"It's hard to comparison shop [checking accounts]," Cora Hume, project manager for the report, said in a press call on Tuesday. That difficulty is one reason Pew is pushing the Consumer Finance Protection Bureau to make clear, uniform disclosure forms a requirement for all banks.

In contrast, the Bluebird account cannot be over-drafted and has one price menu whether a customer is an Alabama or Texas.

Bluebird's online services will rival those offered by big banks: Account holders will be able to make remote deposits with a camera phone; receive direct deposits; make online bill payments; and make peer-to-peer money transfers through an app or online. Bluebird accounts will be free to use when signing up online or cost $5 for a start-up kit at Walmart. Some methods of adding cash or making out-of-network withdrawals have $2 fees.

Many big banks are making real efforts to reach more low-income customers with their own low-cost alternatives. JP Morgan Chase debuted its Liquid prepaid card this summer, which costs just under $5 a month to use and also has robust online services. A basic checking account at Chase costs a minimum of $10 per month.

At least a half-dozen big banks have also revamped their disclosure forms in order to make them easier to read and to facilitate price comparison.

Some critics don't think Bluebird will make much of a dent for big banks. Last year, Bank Transfer Day and Occupy Wall Street raised consumer ire around bank fees and led to some switching of bank accounts by disgruntled customers. However, many of those moved to credit unions, not to alternative services like the one offered by Bluebird. And inertia is a powerful force for customers who might have established payment routines in place and are loathe to do administrative work to disengage from a bank, despite feeling annoyed by fees.

There are also benefits to a checking account that prepaid companies cannot provide, including building a credit score and helping customers access other kinds of loans, like car or home loans.

"The [banking] relationship offers an account as a gateway to other products to help consumers meet financial needs and goals, whether it is to borrow money to buy a car or house," Mark Pearce, director of Depositor and Consumer Protection at the FDIC, told The Huffington Post last month.

Also on HuffPost:

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  • 1. Comparison shop

    Make a list of the fees and rates at your current bank, then look at what others have. Start with our rates page, where you can compare <a href="http://www.moneytalksnews.com/rates/" target="_hplink">interest rates</a> on checking accounts, money market funds, savings accounts, mortgages, and other loans. But don't forget to factor in other conveniences, like hours and the proximity of branches. Don't overlook <a href="http://www.moneytalksnews.com/2010/09/30/7-reasons-you-should-join-a-credit-union-this-week/" target="_hplink">credit unions</a>, either. They often offer higher savings rates and lower loan rates than the megabanks. Search for them at the <a href="http://www.creditunion.coop/" target="_hplink">Credit Union Association</a> site.

  • 2. Negotiate with your current bank

    If you have a mostly happy history with your current bank, take the best offer from your comparison shopping and throw it back at them to see if they'll cut you a break on fees or hike your savings rates. As a longtime customer, you have a little leverage.

  • 3. Get a "switch kit"

    If you do decide to leave, ask your new bank or credit union for a "switch kit." These often come with step-by-step instructions, contact info, and forms to transfer services like direct deposits and automatic payments. But even so, <a href="http://defendyourdollars.org/press_release/cu-report-switching-banks-hard-for-consumers" target="_hplink">Consumers Union says</a>, "Re-routing automatic payments and deposits into a new account can take four to six weeks."

  • 4. Don't close the old account yet

    You may be in a rush to conclude business with your old bank, but it's important to make sure your transition is seamless - missing payments, misplaced deposits, or delays can end up costing you. Leave a cash cushion to cover payments you may have forgotten. Wait three months to close the account completely, or at least until you're absolutely sure all's well. If there are fees associated with transferring your balance - Consumers Union says to expect "$7 to $10 for certified checks and from $24 to $30 for a wire transfer" - you might skirt them by moving money gradually, withdrawing up to allowed limits and depositing the cash to the new account. Using cash more frequently than plastic can also help.

  • 5. Watch the new account

    Keep a keen eye on your new account, checking it daily for the first few weeks. Be sure all your regular deposits are coming in and all your bills are being paid from the proper account. You also want to get familiar with your new bank's quirks, like how long deposits take to clear and how it lists your balances and transactions, to avoid trouble.

  • Make sure you go over all the paperwork relevant to your new account, so you don't get tripped up by processes that differ from your old bank, hidden fees, or upcoming changes. And keep a list of these, since you may want to re-evaluate your new bank sooner rather than later - especially if the government actually does make it easier to switch. Beware of switching again too soon: Consumer Reports says several banks charge $25 fees for closing within the first six months.