Saturday, October 8, 2011

New Debit Card Fees

Anyone with a Bank of America account should already be aware that the company is planning to institute a $5 monthly debit card fee starting in 2012.  They will roll it out slowly, selecting a few states at a time but no specific information is available yet.  This fee does not include use of ATMs but whether you use your card at the cashier once or 100 times, you will be charged $5 for that month.  This is essentially a $60 fee assuming you use your debit card at least once a month.  Wells Fargo and Chase are already testing debit card fees in certain locations and this may prompt them to also institute a global debit card fee for their own cards too.  However, I believe there will always be some banks offering free use of their debit cards and the promotion of this feature will become more prominent in the years to come.

This move comes with several others for banks to level out the fees charged to all their customers.  Many banks have already ended debit card reward programs and eliminating free checking options, forcing consumers to maintain a monthly minimum balance or have a minimum direct deposit to waive monthly fees.  Banks say their reasoning behind instituting these charges come as a reaction to the bill passed by Congress last year limiting fees they charge merchants.  Whether this move will be good or bad, only time will tell.

If I had a BoA debit card that I used regularly, this new fee gives even more incentive for me to switch to all cash or all credit card.  Will everyone be jumping ship from debit cards and BoA?  I certainly doubt it.  I believe many people out there will be a little annoyed but nothing more.  However, you should know that there are still other banks who do have free debit card usage and free checking.  Always be on the lookout for free banking services, even as they become a thing of the past.  The idea of paying fees to spend my own money seems a little ridiculous, but as times change we can only adapt.  The new revenue structure for banks may be beneficial as a whole since only those willing to pay these fees will stay with them.

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