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davejh23 (< 20)

BAC to charge $5/month for debit cards

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September 29, 2011 – Comments (24) | RELATED TICKERS: BAC

http://finance.yahoo.com/news/Bank-of-America-to-charge-apf-1381425092.html?x=0&sec=topStories&pos=main&asset=&ccode=

Quick poll:  Is there anyone here that would be willing to pay $5/month for the "privilege" of using their debit card?

I know I wouldn't.

I'm assuming this move wasn't designed to create a significant revenue stream...it's more likely that they're actually trying to discourage the use of debit cards.  I'm guessing it will work...many will stop using their debit cards and/or close their accounts.  Others will probably overlook the fee for a time.  Then, when they realize they've been charged $5/month, they'll get ticked off and move their accounts. 

24 Comments – Post Your Own

#1) On September 29, 2011 at 2:47 PM, motleyanimal (36.75) wrote:

Hell no!

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#2) On September 29, 2011 at 3:15 PM, silverminer (30.05) wrote:

Supremely indicative of all the reasons why I severed my previously longstanding banking relationship with that horrifically mismanaged and persistently endangered company.

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#3) On September 29, 2011 at 3:16 PM, Schmacko (91.94) wrote:

I disagree with your statement about not being designed to create significant revenue.  I think that's exactly the point of this.  The article even says the reason this is happening is due ot legislation that will limit the amount banks can charge merchants for debit card transactions.  It says that's up to $19bil in transaction fees the banking industry is going to lose and so they are trying to make some of that money back up by sticking it to their customers. 

Apparently SunTrust has already adopted something similar and Wells Fargo and JP Morgan Chase are testing it out as well.  Probably be the new industry standard by mid next year.

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#4) On September 29, 2011 at 3:31 PM, whereaminow (< 20) wrote:

This is completely in response to the totalitarian debit card price fixing scheme that caps debit card charges on merchants to 21 cents.  It's an attempt by BAC to recoup that money through the customer instead. 

Thanks government!

David

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#5) On September 29, 2011 at 4:30 PM, leohaas (30.13) wrote:

We can all easily avoid this charge by either dumping BAC or no longer using debit cards. Just use cash for small purchases and a credit card for large ones (and make sure you pay the credit card balance in full on time).

Thanks competition!

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#6) On September 29, 2011 at 4:41 PM, davejh23 (< 20) wrote:

"We can all easily avoid this charge by either dumping BAC or no longer using debit cards. Just use cash for small purchases and a credit card for large ones (and make sure you pay the credit card balance in full on time)."

This is exactly what will happen.  I believe debit card useage has been on the rise as consumers have either lost access to credit or simply made the decision to avoid credit cards that got them into trouble in the past.  The vast majority of consumers are not going to pay $5/month for nothing...they'll switch banks, switch to credit cards, or switch to cash.  BAC revenue will not increase and deposits will decrease.

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#7) On September 29, 2011 at 5:47 PM, devoish (67.86) wrote:

Cash is cheaper. Good ole American greenbacks. Its not like BAC is paying me a high interest rate for my money or anything like that.

And unlike the embarrassed guy in the commercial, I don't care if the world stops and everybody waits in line while some college grad struggles to calculate my change.

F the fed, and their banks.

Best wishes,

Steven

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#8) On September 29, 2011 at 6:19 PM, 100ozRound (28.55) wrote:

Things like this is why I use a credit union.

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#9) On September 29, 2011 at 6:22 PM, 100ozRound (28.55) wrote:

BTW - you can opt to trade your debit card in for a simple ATM card but you won't have the priviledge of using it for purchases.

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#10) On September 29, 2011 at 6:28 PM, mikecart1 (77.91) wrote:

Citigroup lost my business last night.   Still deciding on Bank of America today.  Banks seem to think they are the only option.  I can easily stuff my money in the stock market and make far better returns.  They act like they doing us a favor.  In reality, it is the other way around.  I'd love to see everyone cash out their accounts and take a stand.  One by one these banks will be begging us back with rewards and treats.  It is time to stand up and fight.  Fight for our right to own our money and not pay others!!!  This is America!!!!!!!

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#11) On September 29, 2011 at 7:14 PM, mhy729 (30.26) wrote:

Banks seem to think they are the only option.  I can easily stuff my money in the stock market and make far better returns.  They act like they doing us a favor.  In reality, it is the other way around.  I'd love to see everyone cash out their accounts and take a stand.  One by one these banks will be begging us back with rewards and treats.  It is time to stand up and fight.  Fight for our right to own our money and not pay others!!!

This.  We need everyone to be more pro-active with their saved money and not just stuff it in the banks.  The laughable amount of interest they pay on deposits, and the increasingly onerous fees they charge on everything is ridiculous.  Profits from facilitating financial transactions should be as small as possible imo, and that is only possible if we pressure them (not politically, but with our money).  That's the way the free market is supposed to work right?  Profit margins get squeezed by customers forever seeking lower prices (in this case lower costs associated with banking).  All of these banks have such pricing power because we willingly provide them our deposits without much thought for demanding the very best for our money.  Why should these banks be able to make more money for themselves by playing around with ours, not to mention have the added ridiculous privilege of getting bailed out with our taxpayer money when their casino bets blow up?

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#12) On September 29, 2011 at 8:03 PM, whereaminow (< 20) wrote:

Yay competition, leo?  Wells Fargo is charging $15 a month. ROFL, this isn't about competition. Every bank and credit union will recoup this cost of your pocket and my pocket in another way. 

Debit cards did not arrive on our planet from outer space. They don't pass through a membrane from a parallel universive.  They have to be created and protected, and that costs money. 

And remember, I'm no fan of the banks. But this is what you get. They are called unintended (although entirely predicted) consequences of authoritarian government regulations.

David in Qatar

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#13) On September 29, 2011 at 10:52 PM, memoandstitch (< 20) wrote:

It is correct for debit card users to pay more than cash customers because card usage increases the cost the for merchants.

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#14) On September 30, 2011 at 12:18 AM, CCharing (90.93) wrote:

nope.  Is this everyone/when does it take effect?

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#15) On September 30, 2011 at 8:17 AM, PainterPoker (26.62) wrote:

Yay for credit unions

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#16) On September 30, 2011 at 9:06 AM, drgroup (67.40) wrote:

Credit card usage is down. As a result less revenue is being generated from boa card credit cards. Being compensated from debit card use is a start.BOA thinks "Lets make some adjustments to the fees as we go down the line.We can even make it $10/mth, people are lazy and stupid. They walk around in bed slippers all day hittin on the pipe. They have gotten soft. This will fix them." I think I'll call the abusive Stepfather in the WH to see if he helped set this in motion. What do ya think...

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#17) On September 30, 2011 at 10:21 AM, CluckChicken (< 20) wrote:

"And remember, I'm no fan of the banks. But this is what you get. They are called unintended (although entirely predicted) consequences of authoritarian government regulations." David in Qatar I know your pure hatred of all things government but on this like many people here are all little blind as to what happened. Before the new regulation every transaction that was happening with a debit card banks were charging the retailer .44 now they can charge at most .24, this charge had been steadily rising. One of two things was going to happen either the retailer was going to raise prices across the board or get somebody to limit the amount that could be charge for the transaction (they went to the government for help with this).

 

Lets just say retailers got upset and raised prices across the board by .44. Last month I had 40 transactions on my credit card, which would mean I would pay an extra 17.60, if I was only purchasing 40 items. I know this move doesn't mean that retailers will still not raise prices but we do not that banks were still raising their take per transaction, so at least for now it appears that I could be saving 12.60.

Of course given the large number of banks that provide Debit Cards and the number of Credit Cards out there it should not be difficult for people to find a way to still have a card and not pay a fee or to find one that has a fee but gives them something they think is worth the fee (my hotel card has a 60yr fee but I get a free night each year with it, which I have no issues using).

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#18) On September 30, 2011 at 10:50 AM, drgroup (67.40) wrote:

#17... You have stated the obvious, thank you. But why don't the banks reduce the amount of expense it takes to process the transactions. These transactions are all processed by computer, with the exception of the sales person. Maybe reduce  the cost of multimillion dollar bonuses to over-payed bank execs; limit expense accounts; start lending money and make obscene profits from repay. I am sure there are many cost cutting ways a first year forensic accountant could suggest in order to avoid this gun to your head approach of larceny....

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#19) On September 30, 2011 at 11:52 AM, outoffocus (23.81) wrote:

@Motleyanimal. I said the exact same thing when I read that question. Not when I use my debit card for free at my credit union. 

Let this be a lesson to all those people who are for bailouts. You bailout the rich and this is how they repay you.

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#20) On September 30, 2011 at 12:00 PM, outoffocus (23.81) wrote:

I have to agree that they are playing on people's laziness. If I'm not mistaken, debit cards no only benefit banks, they also benefit merchants by streamlining payments and ensuring more upfront revenues.  By forcing consumers back to cash, this could actually send our economy in the opposite direction.  BAC and the government are merely shooting themselves in the foot.

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#21) On September 30, 2011 at 12:00 PM, outoffocus (23.81) wrote:

I have to agree that they are playing on people's laziness. If I'm not mistaken, debit cards no only benefit banks, they also benefit merchants by streamlining payments and ensuring more upfront revenues.  By forcing consumers back to cash, this could actually send our economy in the opposite direction.  BAC and the government are merely shooting themselves in the foot.

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#22) On September 30, 2011 at 12:17 PM, TotallyJaded (60.06) wrote:

Debit cards did not arrive on our planet from outer space. They don't pass through a membrane from a parallel universive.  They have to be created and protected, and that costs money.

And that money comes in the form of swipe fees and interbank charges. Not to mention that checking accounts have traditionally been a way for banks to introduce themselves to consumers. 

When you're looking to sling mortgages, investments, credit cards, auto loans, insurance, CD's, and a slew of other financial services, breaking even on debit cards -- or even eating a few cents per customer -- should be the cost of doing business, in the grand scheme of things. Annoying your existing customers in to leaving seems counterintuitive.

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#23) On September 30, 2011 at 1:35 PM, leohaas (30.13) wrote:

Banks will always find ways to fleece their customers, regardless of regulation. It is not because regulation exists that banks charge their customers an arm and a leg for their services. Removing regulation on banks will make no difference.

Yay to competition because there are Credit Unions, thanks to Federal and State charters. I have been a member of at least one for the past 15 years. No complaints here. I just smile when the banks find yet another reason to charge a fee to their clients!

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#24) On November 05, 2011 at 11:01 AM, mhy729 (30.26) wrote:

Hazelwood Credit Unions Feeling the Love from Bank Transfer Day

Nationally, 650,000 customers and $4.5 billion have transferred from banks to credit unions since the Bank Transfer Day movement started.

http://hazelwood.patch.com/articles/hazelwood-credit-unions-feeling-the-love-from-bank-transfer-day

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