There was a mass of headlines today concerning Bank of America’s (BAC) plans to charge you $5/month for using a debit card starting in 2012.
If you use your BAC debit card at a store to make a purchase, you’ll get charged $5 for that month. You can still use your debit card fee-free at an ATM to make withdrawals.
My August post also mentioned that SunTrust (in Atlanta) began charging customers $5 this summer, and Regions Financial (in Birmingham, AL), would begin charging $4 this fall (next month actually).
Seriously, how long before every bank transaction is “taxed”? A study by published by Bankrate.com (Bankrate Checking Study) revealed that 45% of non-interest checking accounts are free of maintenance charges, down from 65% in 2010. And the 2010 figure was down from 76% in 2009!
And the fee’s usually apply to basic checking accounts. Basic accounts are the ones with low minimum balance requirements (which usually also have monthly fees – some accounts charge as much as $12 per month if your average balance is below $1500). So the people who can least afford are the ones impacted the most.
What a joke.
Why is this happening?
These actions are the latest responses to a new set of regulations set to impact the banking industry on October 1 2011.
One aspect of these regulations puts a limit on the fees banks collect from merchants debit card transactions. After October 1, banks can either collect those fees from you (the consumer), or give you an incentive to use your credit card (such as charging you to use your debit card).
And guess what? There is no limit to the amount of merchant fees banks can collect when customers use a credit card. But here’s the real kicker; with no limit on the merchant fees for using credit cards, large banks stand to benefit the most…banks like Bank of America.
At this point in my financial journey, I don’t have a debit card. Instead, I use cash-back credit cards and pay them off every month. But I still thought these fees were ridiculous, so I moved money out of BAC’s hands.
You should consider doing the same. Two safe investing principles are directly related to costs (#2 – Always protect against loss and #7 – Constantly pursue ways to reduce costs).
Head over to Mint.com and look for local banks and credit unions that offer fee-free access to your money. Hitting big banks in the financial statement seems to be the only thing that gets noticed these days!
More bad news for bank customers: Debit card fees
Candice Choi | September 29, 2011