Ditching Your Debit Card

Ditching Your Debit Card

As a followup to Friday’s post about Bank of America’s new debit card fees, I wanted to share something that I learned over the weekend…

According to a BofA rep, you can convert your debit card back into a plain old ATM card if you want. Since the fees are only for debit card usage (i.e., swiping your card at the point of sale like you do with a credit card) this will protect you from grabbing the wrong card and getting hit with a $5 fee. You have to contact them to make this happen.

Obviously, this doesn’t help if you regularly use your debit card, but if you don’t, then making the switch might provide some peace of mind.

11 Responses to “Ditching Your Debit Card”

  1. Anonymous

    Winston) No, I don’t think we will see lower prices for goods since more people will drift to credit unions that are allowed to charge more than the cap.

    It is the ‘too big to fail’ banks that are affected primarily.

  2. Anonymous

    Sun) thats right. Banks are going to have to compete to keep customers. However the new legislation has a loophole so that small banks and credit unions are not affected by the cap — which I don’t think is good.

    Patrick: banks have saved tremendous amounts of money dure to the automation — they don’t need as many employees…

  3. Anonymous

    > and to move these fees (if any) to the consumer side.

    The legislation was put in place to reduce the fees merchants pay for debit transactions. How banks decide to respond to the cap is up to the bank. You don’t see every bank reacting the way BofA decided.

  4. Anonymous

    It costs money, but not what the banks are taking in. I’ve read figures of $0.07 on average for ACH. Banks are still making an awesome margin at the $0.22 cap.

    And for the record, banks are evil. I, fortunately, totally disagree with your sentiment.

  5. Anonymous

    Re: Winston,

    Actually yes, quite a few places, especially gas stations charge a lesser amount if you pay cash. Remember, they take a hit on those fees as well.

    I believe some people are just too quick to jump the gun before thinking through the issue. In some ways, the legislation officially put an end to easy money. This might come as a surprise, but it costs money to maintain the entire infrastructure to allow for debit transactions by both the merchant and the bank. I know most consumers think it’s magic that their cards work but there is no such thing as a free lunch.

    In my opinion, BOA doesn’t want you to use a debit card, but instead of just cancelling the program, they are going to charge a fee that makes you decide if it is worth it to you to have the convenience of easy/available money. The banks have been hammered in the last few years, and they are not all evil as the media would want you to believe. To illustrate, try going two weeks without using a bank or any of it’s benefits. Come back when you realize just how great we have it and then switch to a credit union!

  6. Anonymous

    All those customers of Bank of America should REALLY consider credit unions. Why keep your money at an institution who’s sole goal is to make a profit from your business? Credit unions are member owned and don’t have all these crazy fees. I don’t see any sign of my credit union adding fees and they are actually still paying me interest on my free checking account. Now that I’ve experienced what a credit union offers, I’ll never go near a commercial bank again!

  7. Anonymous

    > and to move these fees (if any) to the consumer side.

    The legislation was put in place to reduce the fees merchants pay for debit transactions. How banks decide to respond to the cap is not legislation, but bank greed. You don’t see every bank reacting the way bofa decided.

    > cash?

    Ikea offers 1% discount for cash. Many merchants though would just pocket the difference and assume customers will pay by credit as part of their markup. This could change, but I seriously doubt it. Unless you’re heavily cash based like a mom and pop shop and cheat on your taxes, I don’t see cash discounts becoming more prevalent.

  8. Anonymous

    “Cash paying customers will not be getting screwed (anymore)”

    Do you really think merchants will pass the savings along to their customers? Or charge less for paying in cash?

  9. Anonymous

    Sun) Not sure why you have a $12 fee for BofA checking. I have a BofA checking account with no fees — perhaps you don’t have direct-deposit paychecks going into the account? From their website, all you need is at least one $250 direct-deposit per month to avoid that $12 fee…

    As for the $5 fee for BofA debit card use…I’m going to ‘wait-and-see’. BofA isn’t rolling out that fee until Jan 2012 (as far as I can tell): and I surely don’t want to jump ship to another bank that is about to levy a similar fee.

    “Figure out a way to charge the merchants.”

    Uhh — the legislation was changed SPECIFICALLY to stop the gouging of the merchants (and hence the higher prices for goods) and to move these fees (if any) to the consumer side. The problem is that merchants have no power to negotiate these fees and they also have ‘merchant agreements’ that forces them to charge the same for debit/credit/cash.

    I, for one, think this is good legislation. Either allow the merchants to charge the fees to their customers, or make the banks charge the fees to their customers. Either way: cash paying customers will not be getting screwed (anymore).

  10. Anonymous

    I am leaving Bank of America (BofA) because they charge me $12 for personal banking. The $5 debit card charge was just the last straw. I am moving over to PerkStreet. I do not begrudge banks for wanting to make money, but people have emotional reactions when you give something free then want to charge for it. Figure out a way to charge the merchants. As consumers, we will pay for it during checkout.

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