Bank of America to charge monthly fee to debit card users

http://bucks.blogs.nytimes.com/2011/09/29/banks-adding-debit-card-fees/?hp

by rdamico • 15 years ago

109 130 15 years ago

bucks.blogs.nytimes.com

rednaught• 15 years ago

They are not alone. I got word from one of my banks, Regions, that they too are implementing a similar charge.

Bank Simple...we're ready for you now.

mattezell• 15 years ago

I got the same notice. I will be using my regions account to draft checks to pay off my highest rewarding credit card now.

learc83• 15 years ago

Just read in the article that the fed lowered maximum interchange fees. Has this translated to lower fees from payment processors for anyone?

dangrossman• 15 years ago

It will for me since my account is priced in terms of "interchange + x%". Whenever interchange changes so do my fees. From what I've read so far, this will actually lead to an increase in my fees beginning in October, not a decrease. Visa will raise the interchange to the new maximum federally allowed value for some card types where they were previously charging less than this.

untog2• 15 years ago

I think the thing that really annoys me about these kind of moves is that they're clearly targeting the less fortunate out there. If I want to avoid the $5 that's easy- I'll just switch to my credit card. But people who don't have enough credit to get a credit card now get punished twice.

I read a fascinating passage in The Big Short (an excellent book on the financial crisis by Michael Lewis) that told the story of a top banking exec boasting about the amount of money they made on "Free Checking" accounts. Far more than they made on the accounts they charged for, because the "free" accounts came with dozens of catches and fines that ended up costing the customer more.

What a foul way of doing business.

AretNCarlsen• 15 years ago

This particular situation is more nuanced than the usual profit-from-the-poor story. Every bank and credit union receives these fees, and in the case of not-for-profit credit unions, the interchange fees truly support[ed] "free checking" accounts. Whereas merchants can lower their prices to pass the money back to the consumers (but won't), banks, conversely, have nowhere to recoup their losses except to charge the debit card users. I would rather see an honest fee like this than watch as overdraft penalties are raised to cover the lost revenue.

tzs• 15 years ago

Switching to the credit might not help. Some merchants charge more for credit card purchases (to cover the transaction fees). Well, technically they gave a cash discount to people not using credit cards because credit card association rules prohibited charging more than the advertised price to credit card users, but the net effect was the same.

And now, due to the Wall Street Reform and Consumer Protection Act 2010, credit card associations are no longer allowed to have that control, so merchants can instead advertise the cash price and add a surcharge for credit cards (ARCO just recently started taking credit cards, and that is what they are doing).

Furthermore, merchants can now charge extra to people using rewards cards. A lot of people don't realize this, but when you use a card that give cash back, or mileage, or points or whatever, the bank and credit card company do not pay for those rewards. They charge an extra 0.97% of the transaction amount to the merchant to cover the rewards.

bilbo0s• 15 years ago

There is actually something more fundamentally troubling about this new fee ...

it drives Americans to use more credit.

It was pointed out to me recently that this tendency towards credit that is really 'built-in' to the rules in our society, would probably end up doing us in one day. Sometimes you don't even think about it. I recall once, shortly after the onset of the financial unpleasantness that began in 2008, I was at an airport trying to rent a car. I thought, "Hey...I'd better start practicing what I preach!" So I whipped out a simple debit card, with more money behind it than the value of the car I was renting. "Nope...we don't accept debit...only credit". I thought, "That's a little strange...no wonder the financial system is taking a crap." I didn't have a lot of time, so I just did the credit card thing.

Point is, there are a large number of places out there that will not allow you to do business with them unless you are willing to go into debt, for however brief a period of time. When you consider the size of the US and the number of transactions being made every day...that's a little concerning.

mahyarm4• 15 years ago

Travel is very prone to this. Car rental, hotels, airfare tickets (sometimes). You also get car rental collision insurance with most credit cards too. Most car rental agencies will also allow you to put a deposit of several hundred dollars instead of a credit card.

It's any industry that is prone to customers doing massive damage easily, like crashing cars, trashing hotel rooms, etc.

pyre5• 15 years ago

One difference between debit and credit is when they do things like authorize payments, but then never actually capture them. When it comes to debit cards, some banks will pull that money out of your account, and not release it until may be 10 days after the authorize expires. On the other hand, these things can happen instantly (or within a day) on a credit card. Some people are rather annoyed when they do something like book a hotel room on a debit card, but then pay on their credit card when they checkout. The authorized amount disappears from their account for ~14 days and they think that they were charged twice (because their bank isn't necessarily transparent about this).

Suan• 15 years ago

Reminds me of something I tweeted a while ago:

"Something's wrong when its easier to earn credit card cash back than interest on savings..."

http://twitter.com/#!/suanyeo/status/106413797811568640

blhack2• 15 years ago

>it drives Americans to use more credit.

Oh it does not. $5/mo is just a way for BoA to disincentive people from using their debit card.

It means more transactions get pushed through VISA network, more fees for visa, and probably a kickback for BoA.

My check card can also be processed as credit, and it usually is. This isn't because I'm buying things on credit, it's just that that's how it is being processed. The money still comes directly out of my checking account.

fungi• 15 years ago

have relatives at another evil bank in another western country.

the way they tell it is that the bank really doesn't want the less fortunate out there as customers. if they could figure out a way to drop them without the public backlash they would.

pyre5• 15 years ago

Maybe the poor should start pooling their own money. For example, I heard about some system where a group of people all pay into a pot once per month, and they rotate through who gets the pot. It basically becomes a forced way of savings because there is peer pressure not to come up short. Though I guess this isn't fully a replacement for a bank, but I guess it could help people save up to a level that they don't have to be a 'bad customer' to a bank.

Qo• 15 years ago

This makes sense to me. Revenues scale with deposits, but many expenses scale with number of customers. Below a certain balance, the bank actually loses money on each additional checking account - better for them if you just go somewhere else. Also, the less money you have in your account, the less certain they can be of the maturity of the loan you've made them. Given they can basically borrow from the fed for free, why would they want your money?

goodweeds2• 15 years ago

If you want to research a foul way of doing business, read up on Chexsystems and the collusion of major banks with national check-cashing firms. 20 years ago a consortium of bankers got together and essentially said, "if we build a credit-report system for bounced checks, we can limit our liabilities from poor people and make them give us 3-5% of their income by blacklisting them from all the nation's banks".

JoshTriplett3• 15 years ago

Blacklisting people who bounce checks seems a lot more reasonable than many other banking practices. Don't bounce checks; you're committing a form of fraud, providing a promise to pay money you don't have. I see nothing wrong with refusing to do business with people who regularly commit fraud.

dendory• 15 years ago

Clearly time to go back to using cash! ;)

Natsu• 15 years ago

This is why I use the local credit union and avoid BoA like the plague.

navyrain• 15 years ago

I fail to see why anyone selects a big bank like BofA/WellsFargo/Chase for their personal accounts, when they are known to have a plethora of fees and dubious ethics, and there are almost always better options in regional credit unions. What am I missing?

untog2• 15 years ago

ATM locations, mostly. Chase has an ATM on every street corner in NYC (OK, an exaggeration, but only just). I know plenty of credit unions refund a certain number of ATM fees, but you can't do thinks like check deposits at them any more.

cpeterso2• 15 years ago

Some banks and credit unions are adding "online checking depositing": you upload a photo of the check to their website. They OCR the photo and process the check. No signature endorsement necessary.

Also, a good way to avoid ATM fees is to get "cash back" when using a debit card at the grocery store.

ejdyksen• 15 years ago

I have a credit union account (First Tech CU), and I regularly deposit checks at a different CU's ATM (BECU has fancy ATMs that scan checks, so I prefer them).

In fact, any CO-OP Network ATM works just as well as my own CU's ATM (no fees, deposits, etc). They have locations nationwide, as most credit unions are members.

Edit: also included in that list: most ATMs at 7-Eleven.

jerf2• 15 years ago

Check whether your credit union participates in this: http://www.co-opfs.org/public/locators/ATMlocator/index.cfm

You can look for the logo on your ATM card.

I don't guarantee anything but you might be surprised. In fact if you already belong to a credit union you might be very surprised. Check for the logo on your card. I belong to a credit union tied to a university that I've since moved about 2 hours away from, and except for loans (which I do so infrequently I don't mind driving for that, there's a full branch about an hour away) I've got plenty of ATM coverage everywhere I go.

InclinedPlane3• 15 years ago

It turns out that basically every grocery store in the country is a no-fee ATM for withdrawals.

thematt• 15 years ago

People choose them because the big banks have historically offered a much larger range of financial services.

Additionally, there are many people who still need to (or like) going to a bank in-person. The big banks offer many more branches than a smaller outfit will.

Also, the flexibility they offer when traveling both nationally and internationally is typically much better compared to a regional bank or credit union.

jarin• 15 years ago

Advertising, brand recognition, mind share, whatever you want to call it. People buy what they know.

michaelchisari• 15 years ago

I switched to a credit union after the recent banking scandals, and I couldn't be happier.

krevis• 15 years ago

Inertia. 20 years ago, at the start of college, I got a free checking account at a smallish local bank. Which got bought by a bigger regional bank, which got bought by another bank, which merged into BofA. I had no particular reason to switch until BofA started charging ridiculous fees.

ROFISH• 15 years ago

I'm with BofA simply because they have branches everywhere. I was in a situation where I needed to deposit checks in six wildly separated cities.

X-Istence3• 15 years ago

Clearly you have never had to deposit a check with them while in Colorado ... they don't have a single branch in Colorado.

cpeterso2• 15 years ago

And, in theory, credit unions let you "think global, bank local" to keep your money circulating in the local economy from the credit unions' auto and home loans.

smackfu• 15 years ago

They tend to buy local banks.

re_todd• 15 years ago

     Some of us choose smaller banks, like Washington Mutual, but then they get bought out by bigger banks, like Chase.  Chase has not been as bad as Bank of America for me, so I've decided to stick with them.  It's cool to have your bank in lots of places while traveling. 
     I thought about a couple credit unions in my area, but they both close at 5pm on Fridays and are not open on weekends.  They are also far from where I work, so it would be hard to get there during lunch hour.  If one of them were open just a few hours on Saturday, I would probably go for a credit union.  But it's just too inconvenient.  Chase stays open until 6pm, so it's easy to drop by after work, and they are open on Saturdays.
     The thing I hate about Chase is that my Savings was free until it dropped below $500 (I think), now there is a monthly fee, even though I've had over $500 for a long time now.  When I ask how to get back to free savings, they try to steer me to automatic transfers to activate fee-less savings.  I can't get a straight yes or no out of them if there is any other way.  They are like stepford wives, programmed to only talk about automatic transfers.  Do they get fired if they say a simple "yes" or "no"?  Is that really so difficult?

RexRollman• 15 years ago

Obi Wan Kenobi thought Mos Eisley was a wretched hive of scum and villainy, but he obviously never visited a commercial bank.

PStamatiou2• 15 years ago

Don't they already do this? If I don't have at least $1500 in my account each month I get charged. So I have this account I never use anymore save for some tiny charges, that I don't want to cancel due to credit score that has to have that much money in it at all times.

jcampbell13• 15 years ago

A checking account doesn't affect your credit score. If you have a line of credit (e.g. overdraft protection), that would be reported, but I can't imagine that would affect your credit score much as the limit on personal lines of credit are small (typically around $500).

Cancel the account if you are not using it.

PStamatiou2• 15 years ago

Good to know!

seanalltogether2• 15 years ago

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures."

I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as printing currency?

refurb• 15 years ago

How do you maintain something as "free" when it costs money? Do you mean having no fees for the digital currency transactions and having the tax payer pick up the cost?

RomP• 15 years ago

Tax payers have been paying for manufacturing of tangible currency for many centuries. Creating and supporting financial environments is one of the features of governments.

chrischen2• 15 years ago

It depends on whether or not there's still room for innovation in digital currency transactions. If there is room for innovation then the private sector should focus on it before everyone combines their effort on a consensus.

patio11• 15 years ago

So you know cash has processing fees associated with it, right? Really. They're totally orthogonal to the cost of physically creating paper or metal currency, and they're mostly subsidized by merchants. Cash management is a hard problem. WalMart spends about 3 million every year moving pennies around -- that actual coin type. Every time a salon owner has to spend time driving to the bank or money leaves a cash register, that's just another cost incurred because the merchant accepted cash money as a payment type.

Checks also have processing fees associated with them. They're mostly subsidized by banks.

Credit cards have processing fees, paid for mostly by merchants.

Merchants really want banks to subsidize their use of debit cards, like banks subsidize their use of checks.

There is no such thing as free, there's just free-from-the-perspective-of-your-own-P&L-statement.

seanalltogether2• 15 years ago

I also understand that maintaining roads is not free, however I'm not paying fees to private companies for the privilege of using them because of how important they are to national infrastructure. I should be paying less overall in taxes to maintain these roads then I would be paying a collection of individual for-profit companies to get the same level of service...in theory.

Is digital currency still too immature to consider the same?

chrischen2• 15 years ago

I think he was saying that the gov't should make it free, not that it is a free service with artificial costs attached to it.

mahyarm4• 15 years ago

Why do banks in the USA charge so much for generic P2P wire transfers between accounts? It's cheaper and quicker to give someone a check in the USA in a face to face situation vs. a simple wire transfer to their bank account. Wire transfers would be cheaper for the bank since they wouldn't have to process paper checks. ACH is kind of there, but that's not open to the general public.

ramchip2• 15 years ago

> WalMart spends about 3 million every year moving pennies around -- that actual coin type

I tried googling the data but I didn't find it. Is there a reference for that?

kalleboo• 15 years ago

It can be done. Up until 2005 Denmark's government-regulated debit card network called Dankort was completely free of fees.

Eventually the banks lobbied the government to allow per-transaction fees to be charged for use of the card, but after only a few months of that practice there was so much protest among consumers that the per-transaction fee was converted into a fixed annual fee.

http://en.wikipedia.org/wiki/Dankort

natesm• 15 years ago

Well, I'm switching (I don't have a credit card). What is a good alternative? I know everyone loves USAA, but none of my family has any relation to the military. BoA is "great" because it is everywhere, is there actually anything as wide spread in the (northeast) US?

bittermang• 15 years ago

I don't even care about widespread. I'll take anybody with a descent website.

smhinsey• 15 years ago

I don't think it's true of all of their products, such as insurance, but I believe the general public can sign up for USAA banking. This was true a few years ago when I was looking for a new bank, but I ended up going elsewhere for unrelated reasons.

spking• 15 years ago

You're in luck:

"USAA's investment products, most checking and savings products, credit cards, life insurance, and shopping and discounts are available to other individuals."

This was a somewhat recent change to expand eligibility.

ambiate• 15 years ago

My coworker just got back from an internship at USAA. She mentioned you no longer need to be related to a service member to open a checking account.

Hands down, they are an amazing bank. I've had Paypal issues which they reversed within 2 days. No ATM charges and monthly refunds for any charges. Monthly interest refund. Great services overall by the people and the web.

I believe you can also take out a credit card. Insurance is only for military members.

jm4• 15 years ago

Is that in writing anywhere? The USAA website suggests otherwise.

https://www.usaa.com/inet/pages/pub_eligibility_task_entry

Who is eligible?

Active, retired and honorably separated officers and enlisted personnel of the U.S. military.

Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS).

Adult children whose eligible parents have or had a USAA auto or property insurance product.

Widows and widowers of USAA members who have or had a USAA auto or property insurance policy.

There are other ways to get in, but it is still via (sometimes indirectly) the military. Occasionally they open it up to employees of various government agencies. You can also get in if your spouse is a member. My wife was previously married to a member of the military and got in that way. I got in when she married me.

USAA is awesome. If I didn't have them I'd probably look into BankSimple.

steadicat2• 15 years ago

You no longer need any relation to the military to join USAA. That said, I recently switched from USAA to Ally. Same features, better rates, and better support. Both banks have decent web sites, and let you withdraw for free at any ATM, so for me they beat even BoA for convenience.

Lewisham• 15 years ago

I really like Ally. I was a little hesitant about them based on their GM past, but now I've switched I'd never go back to a brick and mortar.

People always ask me the same questions: Q: How do I get money out if there are no ATMs? A: I use any ATM, Ally refunds the fee, so even those sleazy but oh-so-convienent ATMs are great.

Q: What if there's a problem? A: When is the last time you saw your bank manager? I never spoke to mine at BofA. Whenever I had anything more than a trifling issue, the teller directed me to call the BofA phoneline anyway. I may as well endrun the whole hassle and talk directly to Ally (who also have very quick wait times).

The only thing Ally doesn't do yet is scanning checks. I haven't got a physical check for a while now, but if I do, I put it into my BofA account (which is otherwise entirely dormant) and have Ally debit it out.

steadicat2• 15 years ago

Ally is rolling out the eCheck deposit feature: http://community.ally.com/straight-talk/2011/04/ally-bank-in...

In the meantime, you can simply mail them your checks, using their free pre-stamped envelopes. It only takes a couple of days for your money to show up. Faster and easier than going through a brick and mortar bank.

pyre5• 15 years ago

For a while international wire transfers required being in a physical bank at BoA, but they've recently (last couple of years) added it to their 'ebanking' site. The frustrating part of this was that their system operated on Central Standard Time... which sucks on the west coast because you have a very short window to do the transfer in (between bank opening in PST timezone and 2pm CST (aka noon PST)... and the BoA closest to me opened at 10am PST...).

jcampbell13• 15 years ago

If you have high balances, you should consider "bank of internet". The name sounds like a joke, but they are similar to Ally in terms of services, but offer money market rates on the checking account. I use them, and don't need a savings/money market account, so it really simplifies things.

They also don't charge foreign exchange fees, and their method for computing atm fees is the amount mod $5. When I was living in china, I actually made money every time I withdrew from the ATM, because the USD amount would be $83, and I would get $3 refund for non-existant ATM fees.

nhangen3• 15 years ago

I got my USAA account before I joined the military, and I know for a fact that you don't need to be in the military to have an account. Best customer service on the planet.

palish3• 15 years ago

PNC bank is fucking awesome. I'm not creative enough to think up enough good things to say about it: they just rock.

PNC has a great website, the people are great (at least at my local PNC), they're very professional, and they're pretty smug about being the only bank left that has "free checking".

http://www.pnc.com

They even refunded me the $17 they charged for a box of checks. (I had gone in and asked for a truly-free checking account, and felt tricked into the $17; so I went back and they genuinely felt sorry for the mixup, and made sure I was satisfied in every possible way.)

~~~

EDIT: incase you're wondering how PNC bank's website looks, here ya go: http://dl.dropbox.com/u/315/random_pics/pnc.png (also shows you the formats you can export your data in.)

X-Istence3• 15 years ago

Ehm, ING Direct does free checking, Schwab does free checking, plenty of smaller credit unions do free checking as well. They are definitely not the only ones.

throwawayday• 15 years ago

Jesus, dude - that's enough info to start hacking someone's life in that png - be sure to blur the email and last numbers of the account before you use a public link.

_delirium• 15 years ago

This page lists a few of the (dwindling) large-ish not-online-only banks that still have fee-free accounts: http://www.pfstuff.com/checking/

Chase is also semi-ok if you keep a decent amount of money lying around; it's fee-free with a $1500 minimum balance, or w/ direct deposit.

subsection1h• 15 years ago

  What is a good alternative?

Here is a list on FatWallet showing the "Best Nationally Available High APY Liquid Accounts":

http://www.fatwallet.com/forums/finance/783099/

Alliant Credit Union is usually near the top of the list. My Alliant checking account has been my primary checking account for years. Not only is my Alliant checking account free, but I currently earn 1.10% APY with it:

http://www.alliantcreditunion.org/depositsinvestments/checki...

Deposits can be made at tens of thousands of ATMs across the country:

http://www.alliantcreditunion.org/about/atms/

I also have my HSA at Alliant because they're usually near the top of the list of best HSA providers:

http://www.fatwallet.com/forums/finance/542257/

misterbwong• 15 years ago

If there's nothing holding you back from obtaining a credit card, why not switch entirely to a credit card?

Used wisely (e.g. paid off every month, never carrying a balance) you can make a rewards credit cards pay you. Credit cards also provide a bit more financial flexibility.

SODaniel2• 15 years ago

You can use https://www.hellowallet.com/ (I have no relation or interest) to find credit unions and banks in your zip.

rsuttongee• 15 years ago

I switched from BOFA to Schwab about two years ago (after them nickle & diming me for years with spurious fees) and I couldn't be happier. Like Ally, there's no physical bank branches (but they do have physical brokerage locations), you get interest on your checking, and they refund all ATM fees.

They also have an iPhone app that can scan checks, and their integration with their brokerage account/trading is really nice as well.

My favorite part by far is the customer service. They always have very friendly, helpful, and knowledgeable people picking up the phone and I've never had to wait in a phone queue.

I don't think their interest rates are as high as some of the other online banks, so if you run high cash balances rather than high brokerage account values it might not be for you.

georgieporgie• 15 years ago

Schwab is awesome. If you're so inclined, it's easy to do (reasonably priced) stock trades. As far as pure checking goes, they've got everything you would expect, but get this: no ATM fees. At all. Any fee charged by any ATM will be refunded to you at the end of the month. Plus, they do it internationally, too! If I recall correctly, they have effectively zero currency conversion fee, as well.

Capital One also has some decent accounts if you need somewhere to keep cash savings with ATM and check access.

andrewjshults• 15 years ago

Can't recommend Schwab enough. The no international ATM fees is amazing when traveling (especially if you are going between countries since you tend to get killed on those secondary conversions if you take out large sums). The only disappointment I've had with them is that my Invest First credit card (2% cash back on everything) is going away at the end of October, because surprise, surprise it's being taken over by BoA. They (Schwab) recently rolled out check deposits from their app so BoA taking away my most used card and implementing this fee structure I'm going to get rid of my account secondary account with them and use just Schwab.

jond20622• 15 years ago

Here is a list of online banks and credit unions you might want to consider:

Ally: http://Ally.com

INGDirect: http://INGDirect.com

Fidelity: http://personal.fidelity.com/accounts/aong/fcma_learn.shtml

Schwab: http://www.schwab.com/public/schwab/banking_lending/checking

Everbank: https://www.everbank.com

Alliant FCU: http://www.alliantcreditunion.org

Incredible Bank: http://incrediblebank.com

Salem Five Direct: http://www.salemfivedirect.com

Bank of Internet: http://www.bankofinternet.com

PerkStreet: http://www.perkstreet.com

Personally, I'd go with Ally. Free ATM rebates. Competitive interest rates. Easy to set up automatic transfers to savings. Free ACH transfers. Remote deposit being rolled out now.

You can't go wrong with any of the other banks either (ING and Schwab are great also), but Ally really has a nice offering.

Also, be careful when and where you use your debit card.

If someone gets a hold of your debit card info, they are accessing your cash directly. With a credit card, they are creating a future liability (no cash out of your account). Further, the consumer protections are not nearly as good on debit cards as they are for credit cards.

I talk about this at length here: http://www.seedlingfinance.com/443/why-i-always-use-a-credit...

technomancy• 15 years ago

FWIW the US portion of INGDirect was purchased by Capital One.

nhangen3• 15 years ago

BankSimple is rejoicing right now.

I have a mortgage and 3 separate accounts with BoA, but they still treat me like a 2nd class customer. This could push me over the edge.

mahyarm4• 15 years ago

It really depends on the branch/employee. I've dealt with idiots, and really great retail bankers at BoA. The stanford mall branch is pretty good in Palo Alto.

nhangen3• 15 years ago

I rarely go to the branch offices because it takes an hour to get through the line. Most of my experience is with over the phone help.

poppysan• 15 years ago

Time for the great BofA exodus of 2012...

sixtofour• 15 years ago

They may lose a small but noticeable number of customers, but they'll gain those numbers back over time. Consumers are mostly frogs in gradually warming water, the difference being that many of us "frogs" don't have easy options for switching pots.

erreon• 15 years ago

I think BOFA and other major banks are hand feeding people to credit unions in droves. I went today and set up my account at RBFCU and I can't wait to get far away from BOFA. Both my parents and I were with them for 20+ years.

codecaine• 15 years ago

fun fact: In Germany it's exactly the other way round at least for 99% of the banks. You will get a free debit card at every bank but you have to put down a considerable amount of money as prepayment for a credit card additionally to the yearly fees. If you want a Deutsche Bank credit card they will lock 1000 EUR before they issue it to you and you will pay around 60-100 EUR yearly.

merijnv• 15 years ago

I think this holds for significant parts of the non-US world. In the Netherlands (and for that matter any European country I've visited) credit cards seem extremely uncommon. I am one of two people in my circle of acquaintances who owns a credit card and I only use it for buying stuff on-line (when no other option is available).

As I understand it you can also only get money from an ATM associated with your bank, making picking a bank an availability issue too. Here you can get money from an ATM not associated with your bank once every 24 hours, making ATM availability pretty much a non-issue.

binaryorganic• 15 years ago

Queue Bank Simple Invites.... now!

SODaniel2• 15 years ago

Goodbye worst company in the US. Hello Credit Union!

illumin82• 15 years ago

What is truly ridiculous is that banks get a 3% merchant fee for every credit or debit transaction charged to their card. So, essentially, they are charging their customers for the very privilege of making money...

And we wonder why the banks are failing... this is why! You don't charge your customers for the privilege of making money! I told my bank that I flat out refuse to use my debit card unless THEY PAY ME at least 1% of the merchant fee, seeing as they are getting 3%.

Right now, I use a Fidelity Retirement Rewards Amex card for all of my purchases. I get 2% cash back on every purchase. For those merchants that don't accept Amex I use a Fidelity Retirement Rewards Visa, which pays 1.5% cash back on every purchase. I encourage everyone I know to do the same.

The reality is that credit/debit card companies make a ridiculous amount of money in merchant fees (up to 3%). DEMAND that they share that profit with you.

baddox• 15 years ago

Is that true for debit transactions? I always thought that credit card purchases cost the retailer money, which went to the credit company and/or rewards programs and/or banks, but that debit transactions cost the retailer nothing but cost the bank.

kgermino• 15 years ago

Debit transactions do cost the merchants, just not nearly as much. I think it's on the order of a transaction fee + .5% for debit vs transaction fee +3-4% for credit.

steve-howard• 15 years ago

Apparently rewards cards incur an extra charge for the merchant. Which essentially means that that cash back comes right out of the merchant's pocket. I don't mind that at all, but it does mean that the bank isn't "sharing the profit with you."

A debit card/check card/credit card substantially eases access to one's money (or money one doesn't have). So I think it's reasonable that they charge at least some fee for it, though if it turns out my BofA debit card is one of those that require it I will probably never use it again.

jamiequint• 15 years ago

No, they don't. The reason this is happening, as mentioned in the article, is that the government recently capped interchange fees to 21 cents per transaction plus 5 basis points on the amount of the transaction. They are charging a fee now to make up for the lost revenue of these lowered interchange fees.

InclinedPlane3• 15 years ago

I've had accounts at Bank of America for the better part of a decade, due to my employer they have been completely free. Just recently BofA sent me a letter detailing all the new monthly charges for my accounts, to the tune of an effective annual fee of $372. The irony is that I never use those accounts anymore, having switched to a vastly superior local credit union about a year and a half ago. Despite having pumped six figures in deposits through them more than once over the course of having them as a bank BofA never treated me any better than if I were some junkie or drug dealer, it was a breath of fresh air to move to a bank that didn't treat me as if I were nothing more than a cow to be milked for fees.

Yevgeny• 15 years ago

Banking has now officially become synonymous with desperation and lack of creativity. What was once saved for accountants in the backroom has splurged into the face of consumers. Once the "idea well" of ingenious ways to earn an extra-buck or two dries out big banks look to corporate tax-breaks. But what happens when supplementary hidden fees and costs just don't cut it? Apparently, this. Interestingly enough, BOA announced these plans with the concurrent release of "_% cash back on all debit card purchases"...coincidence?

Jarred• 15 years ago

Maybe it's because I don't buy much stuff, but I never understood the point of using credit for small purchases like getting a cup of coffee. I don't understand why people would use cash for that either (unless the coffee shop only takes cash/ charges more for debit). The same goes for checks.

Could someone explain it to me?

ghaff• 15 years ago

I don't use debit. Pay off the credit every month. Get rewards points for it. Just no reason to use an additional separate card.

Rickasaurus2• 15 years ago

I have two cash reward cards and use one until I max out the points (%2) and switch to the other for the rest of the year. It's like a free $300 bucks a year :).

Rickasaurus2• 15 years ago

No one seems to be adding: in a desperate attempt to avoid bankruptcy

rshm• 15 years ago

Its anyway the banks fug the customer. Either directly or indirectly using merchants.

maeon3• 15 years ago

Good thing we bailed these guys out...

Bank of America to charge monthly fee to debit card users

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