The big news in the consumer banking industry yesterday was that Bank of America intends to roll out a $5/month service fee for customers who make purchases with their debit cards. Yikes! Five dollars? Per month? That’s a lot. And it won’t matter if you use your card just once or dozens of times.
The good news is that you’ll still be able to use ATMs without facing the new charge, but still. Five bucks. Per month. Ouch. The change will go into effect at the beginning of next year.
And Bank of America isn’t alone in this… Wells Fargo will be testing a $3 monthly fee in certain states starting in October, and Chase has been likewise testing a $3 monthly fee.
These changes are coming in response to new limits on swipe fees that banks can charge merchants when a customer pays with a debit card that will go into effect tomorrow (October 1st). Unfortunately, it looks like these fees are the wave of the future — at least at big banks — so it may be time to start looking at your options.
One possibility would be to find a new bank or credit union that doesn’t charge these fees — at least not yet. Another possibility would be to switch from debit cards to credit cards.
What do you think? Would you switch banks to avoid these fees? Or switch how you pay for things?
10 Responses to “New Debit Card Fees on the Horizon”
This is really no surprise to me as the big banks will always find a way to make a 300% profit off the people. And you wonder why our country is in the crapper. Thank the Good Lord for Credit Unions for now. I am sure they will eventually charge, but since they are not charging yet, this will be a perfect opportunity for them to gain new customers. Eventually, the only bankers that will be banking with the big banks are the bankers themselves and the people that do not pay attention (ignorant consumer). These big banks will eventually have to fail, hence another bail out, hence the decline of the economy.
USAA took a poll of members on which of the fee-funded features they valued least. Based on that, they’ve eliminated their 0.5% cash back on debit transactions, keeping Checking interest and ATM fee reimbursement. Apparently, cutting any of the three would balance their books.
Didn’t much matter to us — 0.5% was low enough we put everything through credit cards with higher cash back anyway.
Can we have some clarification to the new law? Is it any debit card purchase… or is the new lower fee for merchants for debit PIN purchases only?
As I understand it, I thought debit NON PIN purchases process as credit cards…
So, we have to be careful when we say debit card, what type of purchase we are making… and how the BofA, Wells, and Chase apply their fees.
If you do all your debit card transactions without a PIN, does this still matter?
Weird – my rewards checking account actually pays me interest _if_ I use my debit card. It’s with a credit union, but those types of accounts are available at some banks as well.
I already have a credit card with the bank I have my debt card. In fact, since it is a rewards card, it would make sense for me to use it more than my debit card. However, the convince of swipe and forget, the debit card has ruled as my preferred payment. Now a $3 fee is enough for me to use my credit card & promptly log-on to the website “transfer” the money each day or return to using checks.
I’ve been with a credit union for most of my financial life. Even so, I use a reward-based credit card for practically all purchases, then pay off the monthly balance and collect rebate checks.
Do you think this will affect credit unions and banks who reimburse ATM charges? I think they do so based on debit transaction fees.
I moved to a credit union. No fees, interest checking (remember that?), excellent loan/card rates, 28,000 free ATM’s and even shared branches across the nation. Why would I ever bank with a too-big-to-fail bank again?
It’s so “kind” of the banks to so inspire us to use cash again! 😉 I’m fortunate enough to be a credit union member (no fees at all) if I absolutely must shop online vs. locally, but I hope this moves more people to cash-based shopping. It’s so much better for the budget.