Bank Of America - new $5/month fee for debit cards

[Nick1911]

http://money.cnn.com/2011/09/29/pf/bank_of_america_debit_fee/index.htm?hpt=hp_t2

TL;DR: Bank of america has decided to charge $5 a month for any account which has a debit card transaction in it during that month.

Just more crap fees.  I think this is the final straw, I've submitted an application to the local credit union for a checking account.  I'm done with these guys.

[mtnbkr]

Well damn.  I've been happy with the service I get from BoA, but if this does go into effect, I'll be moving my money elsewhere.  We use debit/check cards for just about all of our purchases.

Chris

[SADShooter]

I really only use my card for ATM cash, but I may change banks on principle. We shouldn't forget, though, that this is a reaction to the fee caps our congressmonkeys imposed under Dodd-Frank. Cue Mel Brooks: "We've got to do something to protect our phoney-baloney jubs!" Or that other banks are moving in the same direction.

[mtnbkr]

I just checked, Suntrust is doing the same thing.  Wachovia/Wells Fargo doesn't appear to be...yet.  Haven't checked other banks.

Chris

[TommyGunn]

Banks are being crunched by the recession (....depression? ?...) and are trying to raise $$.  I wouldn't be surprised to see other pesky charges to be tacked on here & there.

[zxcvbob]

Why don't they make money the old fashioned way (no, I don't mean stealing it) -- by lending money and charging interest on the loans?  Banks are hoarding cash right now.

[TechMan]

I heard a news broadcast to expect all the major banks to be doing this soon.  The bank reform act passed by the congresscritters allows the banks to do this, IIRC.

[mtnbkr]

Thought about that as well.  I may hold off and see what other banks do this.  If it looks like a mass movement, I'll shred my debit card, use nothing but my Cabelas Visa, reap the rewards, and pay off my charges as I accrue them (easy and free to pay bills via online banking).

Chris

[Fly320s]

Why don't they make money the old fashioned way (no, I don't mean stealing it) -- by lending money and charging interest on the loans?  Banks are hoarding cash right now.

1. Low interest rates. Hard to make money with low margins.
2. No one is willing to lend; the banks are skittish.
3. Not many applicants; the businesses are skittish.
4. New banking regulations require stricter conditions on loans and balance sheets.
5. Fistful.

[seeker_two]

Wachovia/Wells Fargo doesn't appear to be...yet. 

W/WF has been good so far about not getting into this nonsense.....if they do, I'll transfer everything to my local credit union....

[Waitone]

The Frank/Dodd bill took something like $60 billion in revenue out of the banking bidness.  A lot of that loss came at the expense of debit card transactions.  BB&T waives the fees in exchange for a direct deposit.  Another thing to look for is minimum charge on debit cards.  That is most likely the direction BB&T will take.

Me?  Preparing to go cash where ever possible.

[zxcvbob]

Me?  Preparing to go cash where ever possible.

That's a good way to end up on the terr'rist watch list (using cash for everyday transactions is awfully suspicious -- and you're cheating the banks out of their transaction fees)

[K Frame]

I told you they were evil, Chris, but no, you wouldn't believe me...

[Scout26]

USAA: no fees, no charges, free checks, rebate ATM fees. 

Love my bank.

[GigaBuist]

I heard a news broadcast to expect all the major banks to be doing this soon.  The bank reform act passed by the congresscritters allows the banks to do this, IIRC.

I'm not sure being allowed to do it was the driver on this one.  I think being allowed to do it was a concession that had to be made for what I really think is driving it:

Transaction fees on debit card purchases (well, online PIN debit) were capped hard with that reform act.  Good for retailers but the banks certainly aren't happy about it.  Those are the two warring factions in this matter and the consumer is stuck between them.    

We were running some numbers at our place the other day. Our typical transaction is about $70. About $1.40 goes to credit card processing fees on something like that.  The reform act capped it, and don't quote me on this, to be something closer t0 $0.40 on that size transaction for PIN debit (which we can't currently do, I'm working on it).  That's a buck in our pocket if we can get you to do a PIN debit vs. defaulting back to a credit-card like sale on your debit card.

Granted, debit was always lower, unless you were talking about sub $5 transactions, but now there's a fancy Federal guarantee to keep them down there so I think we're going to see more places really try and "force" people into PIN debit when they swipe a capable card.

I know I'm working hard on it.  I play with this stuff at other retailers and note which systems know I swiped a PIN debit card and which don't.  Still trying to figure out how they KNOW that, but, whatever, that's another discussion.

But, as a consumer, anybody trying to jack me for $5/mo for having a freaking debit card is going to get the boot.  No way, no how.

[Northwoods]

This is why I've been with a credit union for the last nearly 10 years.  BoA screwed my parents probably 17 years ago.  I promptly closed my account there and went with a small, local bank.  A few years later, when I was starting my first job out of college I got turned onto CU's.  Stuck with them ever since.

[AZRedhawk44]

My credit union doesn't do this, but I'm standing tall with the turr'rists and have been living a predominantly cash-oriented lifestyle for several years now.  Heck, I even go in to the gas station attendant and prepay with greenbacks rather than running my debit card.

About the only time I run plastic is on road trips... and that's probably about 50/50 between cash and plastic... and the plastic is nearly always just my debit card.

[lupinus]

My wife and I (much to her dismay) will be going the credit card/cash route. She doesn't mind five bucks a month for the convenience. I refuse on principle.

I prefer greenbacks anyhow.

[MillCreek]

I have a BoA account, although the charge will not effect me due to my balance.  If I was smart though, I would pay for everything via credit card.  I already pay it off every two weeks, and with my REI affinity card, all my purchases contribute to my REI dividend.  I still use my debit card for most purchases though. 

[zxcvbob]

My credit union doesn't do this, but I'm standing tall with the turr'rists and have been living a predominantly cash-oriented lifestyle for several years now.  Heck, I even go in to the gas station attendant and prepay with greenbacks rather than running my debit card.

About the only time I run plastic is on road trips... and that's probably about 50/50 between cash and plastic... and the plastic is nearly always just my debit card.

I would pay cash for everything, but...

I have a Cabela's Signature VISA and a Discover card.  I run almost everything thru the Cabela's card for the 1% back (2% and 3% on a few things) and I pay if off every month.  The cash back adds up fast from utility bills, medical bills, insurance premiums, etc.  And the year end statement is handy.  The only thing I use the Discover for is whatever they are having a special 5% back on that month.  (Discover says they pay 1% back, but it's really only .25% on the first $2000 or so per year)

[mtnbkr]

I have a BoA account, although the charge will not effect me due to my balance.   

Where did you see a balance level that would negate the charge?  I didn't see that.  I probably don't have it though since I keep most of my cash in other account that generate more (some!) interest income.  Regular Savings at BOA are only for short term cash savings.

Chris

[Perd Hapley]

Didn't the lefties throw a fit about ATM fees some years ago?

[MillCreek]

https://www.bankofamerica.com/deposits/index.action?body=check_overview

I have been a BofA customer since 1978 and they have changed my checking/savings accounts many times over the years.  I do know that between my current checking/savings, I generally have over $ 50K on account with them at any one time.  

If I recall correctly, the letter I got from them spoke of either having certain minimum balances, using direct deposit, or online bill paying as some of the means that would waive the $ 5 fee for the debit card.  I will continue to monitor my accounts to see if it shows up, but I use all three of these means.  

[mtnbkr]

Those fees are separate from the fee we're talking about.  I haven't seen anything on BoA or Suntrust (another bank that will impose the $5 fee) that indicates a way around the fee.

Chris

[MillCreek]

In its internal memo, Bank of America said it will levy the $5 fee each billing cycle in which a customer uses a debit card to make a purchase. The fee will not be triggered by transactions at automated-teller machines.

The fee will apply to standard checking accounts, but not most premium accounts held by affluent customers. Banks typically exempt their premium accounts from many fees because they tend to be more profitable than standard accounts with lower balances.

I found this snippet in an article in the business press.  I wonder what the 'premium accounts' are.