For all those who have Bank of America, I think you may have to start shopping around for another bank, myself included. Because starting early next year, Bank of America plans to charge a monthly fee of $5 for people using their debit card to make purchases. But when you start shopping around for new banks, better do some extensive research because a number of banks have already started testing out such fees. But Bank of America’s announcement carries added weight because it is the largest U.S. bank by deposits. (Didn’t Warren Buffet just bail them out recently? Where is he in all of this madness?)
Spokeswoman of BOA, Anne Pace said Thursday that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won’t be charged if they only use their cards at an ATM. Now some of you readers are thinking $5? What’s the big deal? Well the fee will apply to basic accounts and will be in addition to any existing monthly service fees. For example, one of the bank’s basic accounts charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500. So if you feel that $5 is nothing, next time someone takes $5 from you for something that is yours, let me know how that feels because I don’t feel that its fair or necessary for another party to touch my hard earned money, no matter how menial it is.
Chase and Wells Fargo have already started; charging $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.
This is a huge concern for consumers and I don’t blame them. I myself am used to the plastic and find it better than a credit card. Why try to fix something when it’s not broken is the case of what BOA is trying to do but in this case, they only want to fix the pockets of the big shots like the CEO and VP’s of the corporation. Some have even said that should this change take effect, they will take their business to a credit union and I’m definitely one of the first people who will jump ship. Some said that this will change the method they use such as going back to writing checks but who wants to go through that lengthy process of writing it out and then waiting for the money to clear a couple of days later? Personally the best would be to just use cash period but then that would alter the whole banking system wouldn’t it? Oh well. They should’ve thought of that before trying to become greedy with their services towards their customers. Now I’m not bashing BOA, not at all. They’re a good bank and I’ve been with them for years however with everything that’s financially going on with the world, this should not have been something that should suffice.
But also on the flip side of things, starting Oct. 1, a regulation will cap the fees that banks can collect from merchants whenever customers swipe their debit cards. Those fees generated $19 billion in revenue for banks in 2009, according to the Nilson Report, which tracks the payments industry.
There is no similar cap on the fees that banks can collect from merchants when customers use their credit cards, however. That means banks may increasingly encourage customers to reach for their credit cards, reversing a trend toward debit card usage in the past several years.
An increasing reliance on credit cards would be particularly beneficial for Bank of America, which is a major credit card issuer, notes Bart Narter, a banking analyst with Celent, a consulting firm.
“It’s become a more profitable business, at least in relation to debit cards,” Narter said. For the banks, yes and if anybody gets a credit card especially in this economy without a proper means and ways to pay it off, you should not even be issued one in the first place. College students, both current and post grad should really think twice before getting themselves involved with credit cards. To me I think your student loans should constitute as a credit card because majority of you guys will have a long time before that is even paid off. One of my concerns is what did they do with the money that the government and Warren Buffet gave them to bail them out of their financial troubles? Or did someone alter their financial statements so much that no one can really tell if there’s much profit and/or adequate cash flow coming in the company? I mean with talks of lay-offs and this recent news, something needs to change and soon before they lose majority if not all of their customers.
