Posted on 10/02/2011 9:36:18 AM PDT by Diana in Wisconsin
(The news that BofA customers will soon shoulder a monthly charge for debit purchases sparks outrage — and threats to abandon the bank altogether.)
Bank of America, proclaiming that its bottom line is hurt by new legislation that limits how much money banks can charge retailers for the privilege of letting customers pay with debit cards, announced that it will make up for those losses by charging customers a $5 monthly fee. The fee takes effect in 2012 and affects any customer who makes debit purchases. ATM and credit card transactions will remain free. Predictably, the bank's customers are not happy. Fox Business Network's Gerri Willis even cut up her debit card on air. The company's stock tumbled Friday morning following the news, and customers are threatening to leave the bank.
How much will this backlash hurt BofA?
Customers are going to jump ship: "I've been a more-or-less satisfied Bank of America customer for years," says Jon Gorey at The Street. But if the bank intends to charge a $5 monthly fee for "something I can do elsewhere for free, I'm gone." There are plenty of other options, including local banks and online-only competitors like ING Direct, which, unlike Bank of America, aren't charging any fees for debit use. "Thank you, competitive free market."
This could spell the end of debit: It's easy for customers to avoid these fees, says Daniel Indiviglio at The Atlantic. "They just have to stop using their debit cards." And it's likely that they will. A $5-a-month fee to use debit "would push me not to use it in any case other than emergencies" — especially when that fee doesn't apply to withdrawing cash from an ATM or using a credit card. Indeed, "debit could fade away altogether." "Did Congress kill the debit card?"
Hold on. BofA might change its mind: Sadly, Bank of America isn't the only bank set to start charging debit fees, says Sarah Halzack at The Washington Post. But many see the new fees as "trial balloons" — they're testing customers to see how many will tolerate the charges. Consumers should continue to be vocal about their displeasure with these banks, "as they might ax the fee if enough customers gripe about it." "In wake of Bank of America's new debit charge, tips on how to avoid fees"
Actually, Bank of America may win this fight: For now, angry customers are threatening to abandon the bank, says Jessica Dickler at CNN. But it's Bank of America "that could have the last laugh." After all, changing banks isn't exactly a breeze.
Once consumers realize the hassle of it all — from having checks printed to switching their automatic payments — they're likely going to suck it up and stay with Bank of America.
I may be one of the very few people in the USA who has never had a problem with BoA, and I’ve always been happy with their service, and their ATM network is very convenient for me.
I will not blame BoA for charging the fees. It’s a business decision forced upon them by congress yet again interfering in the private sector (limiting vendor “swipe” fees), and rewarding bad behavior (limiting fees the banks can charge) while punishing good behavior (forcing the banks to get rid of “perks” for their good customers, like free checking and free debit cards), all in the name of “fairness.”
But if they do start charging $5 a month for the use of their debit card I won’t pay it. As long as they don’t charge for checking or ATM use, I’ll keep my BoA account. If they charge me for either, I’ll make a business decision of my own and change to another bank.
Mark
BOA
New meaning as follows:
(B)unch (O)f (A)zzholes
Being a fan of Dave Ramsey, I've come to use them rather than my checkbook or credit card. The newer cards, like my BoA Visa debit card is usable wherever Visa is accepted (i.e. nearly everywhere), it carries all the fraud protection of Visa credit cards, and it's no different than using my check book, just more convenient. It also gives me access to a huge network of ATMs.
Mark
I don’t understand all the fuss over a $60 annual fee.
There are people paying $300 a month for doggy day-care and $5 for one cup of coffee.
Consider that we used to pay 10c each for checks. Consider that you have your paychecks and other deposits automatically deposited to a facility - where someone is responsible to oversee/authenticate your withdrawals and payments.
How much would you pay a friend to hold your money in their safe? I don’t mind paying $5 a month for the convenience of swiping a card and getting cash from an ATM at any time of the day or night.
Dodd-Frank mandatorily lowered the profit the banks can make on merchant fees. To stay in business, the banks have had to hike fees elsewhere or else they have to fire a whole lot of employees.
Bank of America is not the only one raising fees. Many banks are having to do so.
Problem is trying to find a bank now that isn’t into how many fee’s they can put on you. My understanding is that CU’s don’t fall under that gov’t mandate because of their size(?)
I agree. Absolutely the worst bank ever to deal with concerning mortgage. I was so happy to pay my mortgage off in 2008 and never to deal with these blood-suckers again.
Myself, I use a Paypal card for pretty much all transactions. Not only is there a firewall between my money and merchants, I also get back 1% of my transactions each month. And if I switch banks, it's a quick change on the Paypal website for where funding comes from, and no changes for everywhere else.
Won't surprise me if Paypal starts up a fee for this service, and I'd certainly consider paying it as well. I like having my money separated from the card, and there's two layers of protection if my card information gets stolen, plus a further protection of an automatic limit on the card's use at any moment.
While Congress does have a role in screwups. Nothing is making BoA or any bank do this but greed. They make plenty of money. The reason for these fees is simply another way to stick it to the little guy.
I’m sure the bonuses of senior management will come from these new fees.
USAA is good bank for military veterans (and anyone else). Been with them for years and recommend them.
I’m sure someone will be by to tell you that was Congress’ fault also instead of the bank. Why they continue to defend the banks, I just don’t understand.
I am surprised that even here on FR people are willing to blame BOA instead of the Congress for what is happening with banking fees.
If we can’t correctly assign blame where it belongs how can we expect the sheeple to ever catch on?
I changed it today; saved myself $10 a month...I didn’t realize they basically UPGRADED everyone without even asking. Grrrr! So, THANKS!!
It’s to the point that I’ll wait for movies from the library. Hell, my Tax Dollars are paying for them anyway, and I don’t need to see a movie the second it comes out; if it’s THAT good, it’ll be available for years to come. :)
Netflix is now down by 600,001 LOL!
“Nothing is making BoA or any bank do this but greed.”
You mean they weren’t greedy before? The way the free market works, competition puts a check on greed. The reason that’s not working now is because of regulation. Regulation is the thing that says you’ve got to do X, and so does your competition. BOA could not get away with this if Congress had not changed the rules for both BOA and the competition.
What you say is more than true. But just because Government deems something now LEGAL doesn’t mean a business or a person should DO IT just because they can.
I don’t plan on marrying a woman. I don’t plan on having an abortion. I’m free to conceal carry in Wisconsin now - but I don’t feel a need to pack heat on my daily round.
Just sayin’.
If the Free Market really were FREE, and we had actual wo/men elected that have READ our Constitution, this sh!t wouldn’t get through Congress in the first place.
I’ll be in my bunker if you need me, LOL! :)
We bailed the big banks out and they continually screw us. BoA should be broken up like the old telephone service so we never again have a bank “too big to fail”.
I no longer deal with BoA, but all the banks are going to add this fee now. Blaming Congress for the stupidity of banks is like blaming rape victims for what they are wearing. Sure it MIGHT have made them more noticed, but no one made them do it.
My bank is a credit union now. Every time I tried to switch banks in the past, it would get bought out by a big bank and turn to $hit.
“Your Plan Change
Dear Diana,
As you requested, we’ve switched your account over to the 1 DVD out at-a-time (2 a month) plan at $4.99 plus tax. This change will be effective Saturday, October 15, 2011.
– Your friends at Netflix”
Sure. NOW they’re, ‘my friends,’ LOL! :)
Same here - I closed my BOA account last year...
“just because Government deems something now LEGAL doesn’t mean a business or a person should DO IT just because they can.”
It’s always been legal. Now it’s profitable. If they’d done this 5 years ago, they would not have gotten away with it because their depositors would have gone to Wells Fargo, or Chase, or wherever. But because the costs of providing this service have increased due to the regulation, every bank is doing this or going to do this, and so they don’t need to worry about the competition.
You can’t count on the “goodness of man” in the marketplace any more than you can count on the goodness of man anywhere else. Everyone is in it for himself. The trick is to devise a system where good behavior is profitable. In that respect, regulation does not beat competition. Regulation simply substitutes the politicians’ preferences for those of the consumer. But in the end, it’s still the consumer who pays for them.
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