You aren’t a Bank of America customer and your bank doesn’t charge debit card fees so you can stop reading now, right? Not so fast. Everyone needs to know about the new Bank of America debit card fee because it may very well affect your account.
In order to make up for the new credit card regulations that cap the amount of fees a bank can collect from a merchant, Bank of America is charging a $5 fee to customers if they use their debit card to make purchases at a retailer but there’s more to it than that. Let’s take a look…
Only for Debit Card Users
Just because you have the card doesn’t mean that you use it. If you never use your debit card for purchases, this new fee won’t appear on your statement but even if you use it just once, you’re charged the fee. Want to avoid this charge? Go back to the days when debit cards were called ATM cards. (In other words, use it to get cash from ATMs only).
ATM’s are Fine
If you don’t pay with your debit card but you do withdraw cash from the ATM, you’re in the clear. This debit card fee is only for people who use their debit card with a merchant. Even if you swipe it and elect to use it as a debit card, you still get the fee.
Want to avoid the fee but avoid the use of credit cards? Do that by taking money out of the ATM and paying with cash.
You Have Some Time
Bank of America won’t charge these new debit card fees until 2012. Bank spokeswoman Betty Riess said in a release that customers would receive at least 30 days of notice before the new fee goes in to effect.
Other Banks Already Planning
Before Bank of America announced the fee, Wells Fargo was planning to test a $3 monthly debit card fee in selected markets and JP Morgan made a similar announcement saying it was testing a $3 fee in its northern markets.
As an increasing amount of legislation has made its way through congress banks have begun to function like the similarly fee-laden airline industry. When one airline announces a fee or rate change, the others tend to follow. As angry bank customers get used to the fee, other banks, from the largest all the way to small local bank will implement similar charges.
Make Some Noise
If you don’t like the fee, tell them about it. The press releases from all banks currently charging or planning to charge these fees say that they’re “testing” the new program. If you complain at your local branch, they may remove the fee. But if you sit idly by as your fees increase then the banks win. Remember, if it works for one bank, the others will follow.
Credit Union
Don’t like all of these customer-unfriendly fees? Go to a Credit Union. Credit Unions are not for profit institutions and often charge less fees and receive much higher marks for being more customer friendly with their policies than traditional banks.
Online Banking
Another option is to switch to an online bank for your checking. Online banks can afford to offer free checking and lower fees because they don’t have the overhead that a brick-and-mortar bank has. You also will find great options like higher interest rates, more ATM locations, and the option to earn rewards when you use your debit card (check out some of the best online checking accounts to see which bank best fits your needs).
Remember…
As banks stay in conflict with Washington lawmakers, expect to see more legislation designed to reign in bank activity in the coming years and expect that the costs of that legislation will be passed on to you, the consumer. There are other options available. Credit unions, online banks, and even brokerages now offer traditional banking services.
In the interest of full disclosure, I do not use a debit card. I have a premium accout at Bank of America and would not incur fees for debit card use. So this change does not bother me. I undertsand that banks love fees. I have fought them all my life. I refuse to pay them and they let me get away with that because of my relationship. I don’t pay for my account, checks traveler’s checks or cashier checks. This was true when I did not have a preium account as well.
You’re in a nice position, with a determination that most people don’t have. I know I’ve struggled in the past with keeping up account minimums.
I don’t use a debit card either. However, if I did, and my bank tacked on this fee, I would dump them in a heartbeat. Thankfully the banking sector is still competitive and there are alternatives that don’t charge fees. I read the other day that of those customers that want to change banks, only 10% actually will. This information is powerful to greedy bankers.
There are still alternatives – for now. If this fee sticks with BofA then other banks will follow.
I need to spend some time figuring how to transfer my money to a credit union.
Yeah, we have some nice ones near us and we may have to consider one. That or move all-in to an online checking account.
I understand that BOFA needs to make money but I will simply avoid the fee by using non fee charging banks. No sweat off my back. I will just take my services else where.
Thank goodness I don’t deal with Bank of America. Any bank that charges me I will withdraw my money and move elsewhere. It’s ridiculous. I’d rather put my money under my mattress than incur fees for letting THEM use my money.
And then add in the fact that tax-payer money bails them out and your dollar really isn’t going far there.
When congress and the president implement far reaching so-called financial regulations that limit a variety of fees, interest rates and other charges, we should be aware of the unintended consequences. And those consequences are that banks, like any other profit based entity, will look elsewhere to continue to maintain and grow earnings, as they should.
I would be offended if they did not.
And that is a big problem here. Rules were set to limit fees but, like weeds, new ones crop up that are harder to kill.
I have already closed my account with BofA. This $5 fee is just their first step, along with the other 2 “giants”, towards other charges and fees. Transferred my account to other bank.
I can’t blame you.