Bank of America To Charge $5 Monthly Fee For Debit Card Usage

[The Straight Story]

Bank of America To Charge $5 Monthly Fee For Debit Card Usage

Bank of America customers with basic checking accounts will be hit with a $5 monthly fee in order to use a debit card for purchases, Bloomberg News reported Thursday.

Banks and card companies have been aggressively establish and raising fees in recent weeks as banks plan for new rules taking effect Oct. 1 that limit the amount they can charge retailers for each debit card purchase.

JPMorgan Chase and Wells Fargo are currently testing $3 fees for debit cards in select areas, and Citibank recently announced it is raising its fees for checking accounts.

"The economics of offering a debit card have changed with recent regulations, and we've decided to introduce a monthly fee for customers who use their debit cards for purchases," Anne Pace, a spokeswoman for Bank of America, told Bloomberg.

http://www.mercurynews.com/bay-area-news/ci_19003931?source=rss

[ingac70]

1. So glad I am with a credit union! n/t

[valerief]

4. Moi aussi! nt

[geardaddy]

25. Fi hefyd

Me too.

[spartan61]

2. So is Suntrust beginning in Nov.

[Horse with no Name]

3. These banksters took our money

reinvested it in their own portfolios, gave some of it back, played funny money finances with the rest and PRETENDED to give it back, now, want to charge us more to use OUR own money.

This should be illegal, but it isn't.

And there isn't a fucking entity out there who will do the bidding of the PEOPLE...only those that will enhance their campaign funds are worthy of that.

Disgusting.

[valerief]

6. The Contract on America Congress changed everything. nt

[dixiegrrrrl]

63. And...Citibank just announces new fees, citing new law.

Citibank sent customers a letter informing them that starting in December, they're raising monthly fees on checking accounts, in some cases by double.

EZ checking will run you $15 a month, up from the current $7.50 a month. Previously the fee would be waived if you kept a minimum balance of $1,500. That threshold will increase to $6,000.

The monthly fee on basic checking will go from $8 to $10. The minimum balance required to get rid of it is $1,500, or signing up for direct deposit and online bill .

More:
http://consumerist.com/2011/09/citi-jacks-up-monthly-fees-on-checking-accounts.html

[gratuitous]

5. What recent regulation is Anne Pace talking about?

Thankfully, nobody at Bloomberg thought to ask. So Bank of America's naked greed will simply be filed away under too much government regulation, and provide another lovely (and empty) talking point for Republicans. What a happy coincidence for the robber baron class.

[Ruby the Liberal]

12. The Durbin Amendment to the Dodd/Frank Finance Reform bill.

They probably thought it was a given due to how much press it has gotten.

Before, banks could charge a fee + % of debit transactions. The Durbin amendment lowered it to a max flat fee (IIRC, $0.12 per transaction). Prior, the average fee was around $0.20-ish, so the banks are using every loophole they can find to make up the difference.

One thing floted b Bank of America a few months ago was to cancel Debit cards as Debit cards and have all "Debit" transactions run through as credit cards (in a hybrid plan), which still have their fees intact. People were howling about this because the money wouldn't come right out of their checking as they go (like debit) they would be hit with the full balance once each month (like credit) from their checking with no ability to make payments (the hybrid). Too easy to lose track of your balance if you are used to ongoing debit charges hitting the account as they incur, so BAC dropped it for this plan.

[SnakeEyes]

28. I dont understand

My debit card has a credit card logo so I can run it as either when I pay for stuff (I never carry cash). When I run as a credit, it deducts the account from my account in the same time frame as running as debit.

[Shagbark Hickory]

31. It's still a debit card though. Subject to debit card rules and fees for merchants.

When our statement comes it shows all the transactions made by debit cards.
We do not have a supermarket type terminal that lets people put in their pin code and get cash back and all that. Every card that comes in is treated as a credit card transaction. Yet those debit cards are still treated differently.

[Ruby the Liberal]

36. I had to have it explained 3 times before I got what they were proposing

and I work in the industry. LOL!

It works like this for a debit card:

• Run a charge through as a debit card - debit card fees applied to merchant (passed along to bank), auto deduction from checking immediately.
  
• Run a charge through as a credit card - credit card fees applied to merchant (passed along to bank), auto deduction from checking immediately.
  
• Run a charge through as a hybrid - credit card fees applied to merchant (passed along to bank), amount accrues and once a month, TOTAL of ALL charges deducted in one fell swoop from checking (not immediate or per charge)

It works like this for a pure credit card:

• Run a charge through as a charge - credit card fees applied to merchant (passed along to credit card company). Amount accrues and once a month, you get a bill for the balance, of which you can pay all or some.

Why the hybrid was attempted by the banks:

• They can allow the convenience of 'debit' while still charging the higher fees to the merchants for 'credit' and they still get their money in full as you don't have a partial pay option.

Why this is a problem for merchants:

• Debit card fees that they pay are (today) much less than credit card fees, as a % of the purchase.

Why this is a problem for consumers:

• You don't see the deductions coming out of your checking until whatever time/day of month the bank decides to 'make the account whole' and then they take everything you have spent that month in one fell swoop (easy to run into overdraft issues here).

So, Rather than go this complicated route, trying to have their cake (higher fees) and eat it too (get the full amount every month), the banks realized this would end up with pissed off people, so they are going with Plan B - charge a monthly fee for having a debit card.

On edit - one sticking point was that debit transactions allow for cash back where credit cards do not. Last proposal I saw (a few months ago) was to allow these hybrid cards to do limited cash back, but there was an open question as to where the fees would fall in - whether they would be at the higher 'credit' processing fees like the purchase or a separate 'debit' fee. Either way, both fees are paid by the merchant, and consumers would never see them (just like today). The problem for consumers was not the fees, it was how the charges were applied (immediately vs once a month).

[dixiegrrrrl]

42. THAT is a marvelous explanation.

Very very helpful, I am clipping and sending on.

Thanks.

[Ruby the Liberal]

53. I am glad you found that useful

When my company was tossing these options about, I sat in on about 4-5 different conference calls about the proposals before they FINALLY detailed exactly what a hybrid card would mean.

Happy to hear they are not going through with this (bookkeeping nightmare for consumers and expensive for merchants), but $5 a month is highway robbery.

Do know this - they will not rest until they are able to make back every cent (and then some) that the Durbin Amendment will threaten them with losing.

*sigh*

[dixiegrrrrl]

56. Which they will not be able to do IF enough keyboard warriors stop banking with them.

Boycotting the TBTF banks is essential.

[Ruby the Liberal]

58. Absolutely. I closed my accounts right after I left.

Back to 100% local for me.

[SnakeEyes]

47. Thank you.

Now I understand. Wasn't easy when it wasnt my personal experience.

[Ruby the Liberal]

54. I hear ya. One other note/suggestion

When a small business owner (Doctor/Dentist/Auto repair/whatever) asks you "Debit or Credit" and you are using a Debit card - have them run it as Debit. It will hit your account exactly the same way (no fees, same timing) and will save them on the fees.

Many don't know that there is a difference between running a card as Credit vs Debit, so I always make it point to say "Debit" and explain why.

On a side note, I told my Doctor's office this years ago - and they politely informed me that I was wrong, "their" bank charges the same for both credit and debit. I offered to audit their fees and compare vs other banks and low and behold, guess who was right. Vindication. LOL!

[Enrique]

14. they explain in the other article

a bit confusing to me, but it seems they found a way to get their money.

The Fed capped debit-card swipe fees at 21 cents starting Oct. 1. It will let issuers tack on five basis points, or 0.05 percent, of each transaction, or almost 2 cents based on the average debit purchase of $38, and a conditional 1-cent adjustment for lenders that follow certain fraud-prevention standards.

The cap, mandated by the Dodd-Frank Act, replaces a formula that averages 1.14 percent of the purchase price, or about 44 cents. The limit may reduce annual revenue at the biggest U.S. banks by $8 billion, data compiled by Bloomberg Government show. Swipe fees for credit cards, which aren’t regulated, equal about 2 percent of the purchase price and generate about $40 billion a year.

[IndyPragmatist]

7. I've dealt with all three bank mentioned, they are terrible. Huntington is great

They are getting new customers like crazy because word is getting around about how well they treat people. It shows that you can treat customers well and still be a very successful and profitable bank.

[FBaggins]

8. And you just know that the WalMarts of the world aren't going to kick back their new profits

This was a dumb idea when it started.

Congress actually mandated a fee schedule that in many cases will be below the banks' cost of providing the service... and it wasn't even a fee that consumers paid.

[Fire Walk With Me]

9. Give BofA no money. Run from them!

[qb]

10. I suppose a lot of BoA customers will snooze right through this change.

ING hasn't announced any such plans, yet, but I'm already doing most of my purchase with cash. Banks are freakin greedy.

[L0oniX]

88. Most of them are idiots anyway. n/t

[hobbit709]

11. There's a cure for that-take your money out.

[Blue_Tires]

32. Took mine out back in '09 and never looked back

Of course I never joined BOA in the first place, they had eaten up two of my previous banks...

[ceile]

13. This is why I use a local bank.

My bank is only in TX and only has 9-10 branches in the entire state. I have no fees for anything- even ATM withdrawals! They actually stopped doing over draft protection which they charged $30 a pop for every time you were overdrawn. Now your debit card will simply be "declined" or the check returned. Can you imagine how much money they are losing by removing this service?

[RockaFowler]

27. I love my local bank, too

We switched from BofA. Hate that bank with a passion.

My local bank is only in Florida and again only has 10-12 locations. One is right next to Publix, so easy access for us. And they decline the card if we go over the limit as well. I love that. This way I never overspend. Plus the bank is just an over the top friendly place. They greet us by name. They actually know me in the bank. I'm no longer a number. I can call and talk to my branch manager and never have an issue at all with their service. Plus they have online banking. It's all good for us :)

[ceile]

35. Yep. Customer service is key.

There are 4 branches here in Austin and they know me by name at 2 of them. Love it.

[dixiegrrrrl]

62. Austin bank closing 14 branches because of the new law. Wow.

(San Antonio, TX) -- IBC Bank is planning to close 14 branches located inside of HEB stores in and around San Antonio by the end of the year. The Laredo-based institution made the decision based on a change in the amount banks can collect on debit-card transactions, which would not allow them to continue to offer free products and services. The closure will affect more than 130 employees, but the bank says most of those employees will be able to take jobs inside other branches that are not closing. The bank says they will be closing their branches inside HEB’s in Schertz, New Braunfels, Kyle, Buda, Georgetown, several in San Antonio, several more in and around the Austin area, and a total of 55 locations throughout their network of banks.


link to story, but that WAS the full story:
http://kgnb.am/news/ibc-bank-close-14-branches-inside-hebs-around-san-antonio

[Liberal_in_LA]

15. holy moly!

[justiceischeap]

16. It's bad enough there are double fees for using your debit card

at an ATM that isn't your banks but now they want to charge us for using the debit cards that they created to cut costs of using checks.

In reality, shouldn't we be charging banks for using our money on their Ponzi schemes?

[dixiegrrrrl]

17. Wonder if this will finally make diehard customers walk away.

I find it so hard to believe that people STILL choose to have checking accounts with BOA.
I am old enough to remember when there were NO credit/debit cards and how to actually use cash.
Banks are shooting themselves in the foot if they price us out of using cards, they will have no cushion of money all month if we use cash.
A revolutionary idea, that, eh?

[Johonny]

19. Well since it is to basic accounts

it will squeeze the poor who have less ability to drive all over town to find a bank location or belong to a company with a credit union etc... Meanwhile premium costumers won't notice any difference. They are squeezing the people with the least to give. The new American way :(

[SoCalDem]

33. and for people with direct deposit or automatic check-payments

they are probably betting that the hassle of changing it all is more than most will do.

[truebrit71]

18. The very second Chase tries that shit with me I will close that account...

Total fucking bullshit....:grr:

[DocMac]

20. I bank with E-Trade.

No monthly fee and they pay all atm fees.

They save enough from having no brick and morter.

Just have to have direct deposit or mail in your check, which takes longer to show on the account.

[GreenStormCloud]

21. Not a big deal.

I remember when banks charged 10 cents per check. A $5 charge monthly to use a debit card is still less than what I used to pay for checking back in the 1960s. When adjusted for inflation it is a lot less.

ATM is free if I use the ATM that is at the bank.

To use checks would cost about 35 cents per check (cost of checks being printed by a non-bank source.)so if I used checks I would be paying a lot more.

I won't bother to change. I get good service from the local branches when I need to actually talk face-to-face with someone.

[dixiegrrrrl]

22. 35 cents a check??

Our bank charges 5.00 for a box of checks that lasts over a year, we write about 10 checks a month.
Free checking.

Local community bank.

But, the point is, supporting the rip off banks is fueling the system that is destroying us.

[GreenStormCloud]

29. Please read what I posted.

I don't use bank supplied checks. I am aware that they are free but the bank doesn't supply the kind that I want. I order checks from an online service. I use checks that have a carbon check after the check is written. That way if I forget to enter the check I have the carbon to remind me of how much the check was for. Such a practice has saved me from overdraft several times.

Currently I write very few checks per month. I mainly use the debit card or pay online. I put the receipt in my pocket and enter it into Quicken when I get home. I check the online balance daily to see what has cleared. Usually debit cards clear instantly.

I just don't consider $5 monthly to be exorbitant. It is cheaper than what I used to pay in the 1960s, even before adjusting for inflation.

[dixiegrrrrl]

39. Now I get it.

[DrunkenBoat]

49. I currently pay less than 5 cents a check through a credit union.

[GreenStormCloud]

64. Do the checks in you checkbook make a carbon copy when you write a check?

Yes, it is a convience to have those kind of checks but they have saved me from accidental overdrafts. $5 a month is a rather trivial amount for folks to get in such a lather over.

My first checking account in 1969 was 10 cents charge by the bank for each check. Of course, since then I have had free checking at most banks that I have used, but not always.

[DrunkenBoat]

76. yes.

[RebelOne]

23. I have savings and checking accounts with Bank of America.

And it will be too much of a hassle to close the accounts and switch to another bank. So after Oct. 1, I will just switch to using cash even though the debit card is convenient.

[Shagbark Hickory]

34. Why do people alway say this?!? Changing to a new bank is EASY AS PIE!!!!!!!!

You take some money into a new bank and say "HIYA!!! :hi: I want to open an account here. Free checking, free check card please."

Once you've done that, then withdraw all the money out of your old account once all outstanding checks have been accounted for and deposit it in the new account.

It couldn't be easier.

[GreenStormCloud]

40. A change over the direct deposits, and notify all the online accounts...

...that have stored the debit card number, and change all the auto-pays.

[Shagbark Hickory]

55. Quit making excuses.

Not a good idea to let people draft your bank account automatically anyway IMPO.
I only do that with the electric company and that's only because they're living in the stone ages when it comes to payment options.

[GreenStormCloud]

59. That's my decision to make, Thank You. N/T

[Shagbark Hickory]

72. It is but you should know that Bof A is a terrible bank. They screw over their customers

who are for the most part powerless to do anything about it.

I should know. I was a b of a customer back before it was cool to hate b of a.

Just sending you a friendly heads up from one DUer to another. Not trying to tell you what to do.

It's a pain in the ass to change your automatic payment preferences but it pales in comparison to trying to get a problem resolved with your account at B of A.

[GreenStormCloud]

75. I have been with them for eight years with no problems.

I don't pay much attention to what is cool.

[City Lights]

79. We made the switch slowly over a period of a few months.

Once all of our auto withdraws or online payment setups were directed to our credit union account, we closed our Chase account. They weren't happy and promised to call us in three weeks to see if we wanted to come back. That was three months ago...we're still waiting for them to call.

[steve2470]

24. I just closed my Bank of America accounts

Way to go , you idiots. I hope you go bankrupt.

[dixiegrrrrl]

43. Putting YOUR money where your mouth is, congrats!!

:bounce: :bounce:

[steve2470]

44. Thanks, Wells Fargo for now (knock on wood), maybe credit union at some point nt

[dixiegrrrrl]

45. uhhh...WF is one of the big bad banks that are all our wealth, didja know?

We dumped them back in 2000.

[steve2470]

46. didn't know that.... time to move to a CU.. thanks.. nt

[dixiegrrrrl]

51. Thank YOU for being willing to not support the system that is trying to destroy us.

did you see this?:

"Some kid in New York today is doing more for your future than any politician you voted for in 2008."

interesting comments....

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2024441

[steve2470]

66. and thank you for that link ! nt

[L0oniX]

89. Hells Fargo is a predator. n/t

[NOLALady]

26. Regions started charging 4$ this month

for debit card use. So, I will no longer use the debit card.

I use a credit card and pay it out monthly, no interest.

[AtomicKitten]

30. BofA is "administering" Unemployment benefits here in California.

I'm set up for direct deposit through them to my credit union which seems to be going okay so far with no fees. BofA did, however, offer the option of using the funds on a debit card and I'm quite certain that option was ripe for extra fees, etc. Ugh.

[Cal Carpenter]

57. AFAIK they do in Michigan as well.

If these fees apply to those funds as well, this is extra fucked up. Not that it isn't fucked up enough as it is, but seeing your post got my hackles up even higher...

Folks who can't even get a bank account to direct deposit their unemployment funds into have to use this BofA card and now there will be a monthly fee on top of that?

Basically a regressive tax imposed by the bank on the poorest people.

Fucking vultures.

[AtomicKitten]

68. I'm waiting for BofA to fail. Again.

Regarding your excellent point that some people that don't have bank accounts may be subject to fees: People can go to a BofA ATM and pull out the entire amount of their Unemployment payment. I had to do it the first time when setting up the direct transfer to my credit union. There were no fees to do that but I wouldn't be surprised if BofA found some way of levying fees on that as well.

Fucking vultures indeed. :mad:

[MilesColtrane]

37. BOA can't go bankrupt fast enough for me.

[rdking647]

38. none forces you to use BAC or a debit card

dont like their policies??? switch... I did and use a credit union for all my banking...

[quinnox]

41. I hope this doesn't affect my ebanking account

I have a small Bank of America ebanking account mainly used for internet subscriptions and it is a completely free account because its online only.

They better not try to charge me $5 a month to use my debit card with this account, otherwise I will cut them loose.

Updated: I just talked with an online Bank of America representative, and he confirmed they are planning on introducing this fee starting next year. They said if my account is affected they will notify me in advance. They wouldn't say for sure my account would be affected but it sounded almost like a done deal.

This is bullshit!

[DrunkenBoat]

48. They get to hold your money & 'invest' it & charge you $60 a year for the privilege?

Highway robbery.

[GreenStormCloud]

65. Just how much do you think they make off a typical low balance account?

Lots of people have an average daily balance of under $200. They get paid and then pay bills the next day. That doesn't leave loads to loan out.

[DrunkenBoat]

77. when you have lots of accounts like that, it does.

anyone who supports the principle that we should be paying banks to hold our money is clueless.

the banks pay *us*. when it gets to the point that we're paying them it's time to keep it under the mattress.

[GreenStormCloud]

78. And then you have to buy money orders, or send cash by mail.

And you will pay 44 cents postage on each bill that you pay by money order. (I pay mine online.) Each low balance account is also an overhead for the bank. There is a cost to service the account. Nothing in life is free, someone has to pay.

For the trivial amount of $5 a month I will not have the risk of carrying lots of cash, will have the bank store a photocopy of every check, will have a record of every debit card transaction, will be able to make online payments (They won't get lost in the mail or be late and don't charge postage.) and have a record of the payment, will be able to access the records online, will be able to balance my account daily, (Much easier than balancing monthly)won't have to go to a check cashing service (and pay their high fees).

Go ahead and try to not use a bank and see how much it costs you to replace all those services.

[blkmusclmachine]

50. The Big Banks will nickle and dime you to death:

I'm OUT!

[sarcasmo]

73. Just like a used car.

[Romulox]

52. These swipe fee limits have successfully transferred the financial burden from merchants

to those who struggle to maintain the required "minimum balance" for free checks/debit card usage.

Well done, Senator Durbin! :eyes:

[GreenStormCloud]

61. The burden was ALWAYS on the customer.

Do you really think that the merchants didn't pass on the cost of the cards to the customers?

[Romulox]

67. Right. But that's who SHOULD pay the fee: the customers of the businesses swiping the cards.

Instead of the customers of the businesses who actually swipe the cards paying the cost, we've "socialized" those costs onto the backs of EVERY bank user, including those who can't keep $500 in their accounts.

[GreenStormCloud]

69. Not true.

It has been against the law for business to have different prices for cards versus cash. So the business have factored in the cost of the cards into what ALL customers pay, even the cash customers and the check customers. Now only the card people will be paying a charge to their bank.

[Romulox]

70. Right. The cost is rolled into the price EVERYONE who shops at a given merchant pays.

That's much more equitable than spreading the costs of this service onto the entire banking populace.

PS: Nobody is lowering any prices because of this. :hi: :rofl:

[GreenStormCloud]

74. They won't lower prices, but they will be a little bit slower to raise them.

Stores do have to compete with each other, and price is part of that competition.

And only those who use debit cards will pay the fee. You can have an account without a card.

Face it. Nothing is free. There is no such thing as a free service, somebody has to pay.

[Romulox]

80. RIght. Nothing is free. The most fair thing is for people who *use the service* to pay.

In this case, it used to be merchants. Now, those costs have been fobbed onto the general banking public.

As for passing these putative "savings" to customers? :rofl:

[GreenStormCloud]

81. It is debit card holders who use debit cards therefore they (we) are the ones using the service.

The merchants never paid for the service, they just passed the cost on to all the customers of the store.

A person can get a checking account without a debit card, although I would not want an account like that.

Stores have to compete with each other. Price is an aspect of competition. If you don't think it is then try starting a store and charge twice as much as your competitor.
They won't lower their prices but they will be a bit slower to raise them.

[Romulox]

82. You're simply wrong. Merchants previously paid these fees.

What you're trying to say is that "Merchants get THEIR money from their customers, and therefore their customers ultimately pay the fee."

To which my response is, that is exactly as it should be.

"Stores have to compete with each other. Price is an aspect of competition. If you don't think it is then try starting a store and charge twice as much as your competitor."

If that is the case, then there is little argument that the government should limit the fees that a business may charge to one class of customers--merchants--while not offering any such protection for another class of customers--bank customers.

This is special interest politics, not consumer protection. In fact, this is bad for most consumers.

[GreenStormCloud]

83. Why should a customer who pays cash pay as much as a card user?

There are several people in this thread who are threatening to go to cash only and not have a bank account. Of course they will be horribly shocked to discover how expensive it is to do that. But why should they pay as much to a merchant as I do? The merchant absorbs an extra cost when I swipe my card. Why should the cash customer pay that extra cost too? It is simpler and fairer to charge me a fee for the bank's service in providing me the card.

$5 a month is much cheaper than what I used to pay in 1969 for a basic checking account.

[Romulox]

84. Because it takes much more than just your business to keep a merchant afloat.

The merchant's ability to sell you a cup of coffee, say, for cash is directly dependent on its ability to sell others coffee on credit or debit cards.

"It is simpler and fairer to charge me a fee for the bank's service in providing me the card."

Nope. If I never purchase coffee at your stand, why should I pay ANY PORTION of the cost? The coffee merchant's customers should pay the cost of keeping the stand open, else it should close. :shrug:

[GreenStormCloud]

90. If you are using a debit card then you are costing someone for the service.

It is fair for those who use the service to pay for it.

[Romulox]

91. Nonsense. You've admitted yourself that the price is rolled into the cost of goods.

"It is fair for those who use the service to pay for it."

This is like check-kiting or a ponzi scheme. Let the customers of the merchants who swipe the cards pay the fees. This way is simply putting the burden on the backs of those who can least afford to pay.

[Hutzpa]

60. Why are people still with Bank of America?

once they start this $5 charge people should leave the bank as a sign of protest.

[Moostache]

71. They can lick that $5 out of my....

Sorry, but there is NO GODDAMN WAY I am giving that collection of fucking criminals and out right thieves $0.05, let alone $5.00 a month...

KISS MY ASS B.O.A.....not on one side and not on the other, but right in the nasty middle!

[Fire Walk With Me]

85. "Bank of America is like a man who's been saved from a burning building and then kicks the fireman

in the nuts." -Andy Borowitz

[RebelOne]

86. According to this poll, 94% said they would change banks.

Cast your vote and bring it up it up to 100%.

www.wsbtv.com/news/business/bank-america-adds-debit-card-fees/nDyJy/

[L0oniX]

87. Hey ...Skank of America ...DIE!