Months ago we posted an article about impending debit card fees. Well folks, here they are. At least at Bank of America and several other large banks. A consequence of the Durbin Amendment to the Dodd- Frank Act, Bank of America, and many other large banks are rolling out monthly fees for debit card users.
There is a huge backlash going on about this claiming it is unfair. There are protests, petitions, lawsuits and all sorts of paperwork being thrown around.
Well, at risk of sounding like a fan or apologist for the banks (and I am not, I am a mere consumer, and pro consumer all the way…) I only ask one question:
Does the company – in this case a bank, provide me with a service that I find reasonable for the price I pay? That is the only viable question here.
The banks will lose a huge amount of money due to this amendment, and the lower fees they were able to charge the retailer for debit card use. The retailers benefited from the difference. What did the consumer get? Lower prices at retail? Did the retailers actually pass those savings on to the consumer? I think not. But the banks will take a big hit, to the tune of over $6 billion a year.
Banks are not in business to lose money, so it is no surprise that they would seek out ways to compensate for that loss. It only makes business sense.
Back to our question… does the service justify the price? In the case of BOA and a $5 per month fee – is it worth $5 a month to you personally for the convenience of having a debit card to use at retail point of sale. Or is it a service that you can live without? Only you can answer that. No one is forcing anyone to use their debit card or for that matter any credit card. I think if I use my debit card several times a month, and enjoy the convenience, $5 a month is reasonable, and it beats building a balance on a credit card. (I haven’t always paid the monthly balance in full – though that is highly recommended.)
If you do not want to pay the monthly fee, just use their own ATM network, and carry enough cash for your purchases. Pretty simple actually. That’s what folks did before debit cards were developed. And banks will be quite upfront about how the fees are applied. Banking is a very, very highly regulated industry. Consumer protections are everywhere, but they cannot be responsible for people who do not pay attention to the changes.
As posted previously, you absolutely MUST read all of the correspondence that comes from your banking institution. They are required to send notices, and it is up to you to read and understand them. Throwing those notices in the circular file is no excuse, and can cost you money!
I really don’t understand all the animosity about the fee. If a company does not provide services or a product I want or need, at a price I am willing to pay, I shop elsewhere. End of story. It would be different if they were a complete monopoly and there were no alternatives.
If the gas station on the corner charges $3.95 per gallon, and the one across town charges $3.50, I do not park at the “evil” station and protest their price. I shop elsewhere.
For those of you who are not willing to pay fees for debit cards, or any other fee coming down the pike – here’s the deal…
YOU have to decide what services you want, or need, and what you are willing to pay for them. That’s all. There are dozens of options from megabanks to online-only banks, cooperative banks and credit unions – all providing ways to help you handle your money.
Find a bank that does not charge this fee. Smaller banks and credit unions may be exempt from the Durbin Amendment, and unaffected by the debit card rate change, and are not going to charge debit card fees. (If you are not careful, you may find yourself using an “off network” ATM, paying 1) a transaction fee to the owner of the ATM, 2) an additional transaction fee to your bank, or 3) a monthly debit fee – just for not planning ahead!)
The choices are all still there. You just have to do the due diligence and choose the banking services provider that suits your needs.
(PLEASE NOTE: Some banks are now charging for teller transactions, paper statements, phone banking, and some plan to charge for online banking-yep, get used to the convenience, and soon, you will pay for it!)