Five Bucks, Chucked

After being rightfully pegged as the poster child of Wall Street greed in a lousy economy, Bank of America is reconsidering that whole $5 a month debit card fee for its customers.

Bank of America is considering softening its controversial policy of charging some customers for making purchases with their debit cards, according to a person familiar with the bank’s plans.

In September, the bank announced that it would begin charging most customers $5 a month if they used their debit cards to make purchases.

The fee, which would begin in January, set off a barrage of public outrage at the bank.

Now, under proposals being considered by the bank, Bank of America would offer customers new ways to avoid having to pay the fee.

Currently, only customers with certain premium accounts would be exempt from the fee.

Unless one of the ways B of A is planning to have customers avoid the fee is “are you a customer?” then the damage is already done.  The whole concept of knifing people in the back for $5 a month was the best thing to happen to efforts like the Move Your Money project since the financial crisis, and hey, let’s remember that a week from today is Bank Transfer Day.

They must be scared if they’re backtracking already on the plan.

41 replies
  1. 1
    Jeff says:

    First Netflix,then BoA, do you ever think that the world is being run by morons?

  2. 2
    Mino says:

    And banks are complaining about too much money on deposit. So they want to charge to hold yur money, too.

  3. 3
    harlana says:

    So how are they gonna get that $5 a customer every month they so desperately need? Layoffs, mebbe?

  4. 4
    gelfling545 says:

    Just get all the facts before you change banks. My checking account is no longer at my CU because they have had such a fee for 2 years & it applied whether you used ATMs or not. I didn’t even have an ATM card for that account & they still charged it. Not all CUs are wonderful either.

  5. 5
    GregB says:

    While discussing the transfer of my 401K from another bank to my credit union, I asked the clerk how they doing in light of the BofA fee charge.

    She said that they have been getting new customers in droves.

    Keep it up big guys.

  6. 6
    cathyx says:

    I once had a CU charge a finance charge after every debit/credit financial transaction. So when I would pay the bill, there would be a few cents still owed because of the time lag of using the card after I paid the bill, but before they processed the payment. When I realized what they were doing, I quit using it as much, just leaving the 4 cents there until I needed to use the card again for a purchase. Then I got my credit report and it showed a report of a late payment of 4 cents, dinging my credit score. I never cancelled a card so fast.
    My new credit union would never do such things. They are what a true credit union be.

  7. 7
    MattF says:

    Wells Fargo too, apparently. That great big idea that banks should make all their revenues from customer fees and hedged financial bets, rather than through lending money… maybe it’s not working out so well. We shall see.

  8. 8
    John S. says:

    @Jeff:

    The world is being run by morons. There really is no other explanation.

    I’ll give you a personal anecdote. The company I work for is run by geniuses who think that the best way to increase weak margins is to 1) destroy the commission structure for our salespeople 2) eliminate employee benefits and 3) bury language into the employee handbook that would allow pay cuts based on poor performance at the “sole discretion” of the company. This in the midst of already having massive employee retention issues and being understaffed by 50% in dozens of vacant sales and operations management positions.

    To call them morons is probably being overly generous.

  9. 9
    Napoleon says:

    I have always banked at smaller local banks. They have always offered better deals then the big banks.

  10. 10
    JScott says:

    With their EPS in the negative area, BofA is grasping at straws. I guess they counted on other banks following along, but most banks aren’t as desperate.

    Netflix was acting like they were still the only game in town. Didn’t they see Amazon Prime and DISH Blockbuster coming?

  11. 11
    ErinSiobhan says:

    Exorbitant bank fees have been a hallmark feature of Canadian banks for years. Now it seems that Americans will also get to enjoy the pleasure of moving accounts and negotiating with their banks to keep fees down to a manageable level. My last bank lost most of my accounts when they charged $35 for 100 blank cheques. Such a pain.

  12. 12
    cathyx says:

    @ErinSiobhan: Do you have credit unions in Canada?

  13. 13
    catclub says:

    Kasasa Checking. look it up.

    pays real interest – 2-3.5%
    up to balance of $25k
    need to have email statements, electronic transfers
    and 12 debit card trans per month.

    $700/yr in interest on $25k

    Money market funds are currently paying 0.01%

  14. 14
    scav says:

    OT but combines the pre-existing OWS and British Meida themes that pop up and may provide a less dour note to the start of the day. Occupy London plays with Thermal Imagery á la Telegraph and finds? Thermal Cloaking Devices? Media Bias? Anyway, the cheery little wave at the end of the video and the last line of the article just put me over the edge.

  15. 15
    cathyx says:

    @scav: Next they’ll claim the the occupiers are hiring people to sleep in the tents for them.

  16. 16
    scav says:

    @cathyx: Daily Mail will claim that they hire Immigrants Taking Our Sleeping On The Jobs!

  17. 17
    waratah says:

    One of local banks offered to pay $5 a month for one year if you bring in your Bank of America, Wells Fargo Chase cards. Just open up free checking with direct deposit, no money limit. This offer was limited to the big banks not the local ones.
    They not only had customer back lash but competition from the local owned banks.

  18. 18
    ErinSiobhan says:

    @cathyx:

    There are credit unions but the monthly service charge is a pretty standard feature, even with many credit union accounts. Fees of $4-$12 a month are fairly common.

    The best account I’ve found is operated by a subsidiary of one of the big banks. It’s a true no-fee chequing account with the drawback that there is no actual bank with teller service, just a kiosk in a grocery store.

  19. 19
    hitchhiker says:

    It would be a wonderful thing if the customers themselves made B of A small enough to fail.

  20. 20
    gelfling545 says:

    Again I say, check carefully. Our one long-time “local” bank is a nest of pirates so vicious as to make BoA look like a bunch of playground bullies and so deeply embedded in local politics that it is rumored that the CEO picked the last (disastrous) Superintendent of Education personally. My bank for years has been a very large international bank (which took over another long-time local bank)which had the best fees & services around. They have just recently sold off their local non-corporate accounts to a more recent local bank of which I have heard good reports. The Pirates & Brigands Trust of which I wrote earlier tried to grab those accounts but were not, gods be thanked allowed to. We will see.

  21. 21
    PeakVT says:

    @Jeff: Do you ever not think that the planet is run by morons? And by morons I mean sociopaths with poor prediction skills.

    ETA: @gelfling545: Small(er) banks are not necessarily good, but they are also small enough to fail.

  22. 22
    FlyingToaster says:

    I severed my “relationship” to BoA last May/June; they kept sending me statements until I called and demanded they stop.

    I couldn’t find a local, reliable, convenient CU; instead I went with a local savings bank which gives me free accounts for half the minimum balance that BoA started charging me for in April. I found it through both online comparisons and a family member who got an account there for parking USD (she’s been overseas for 15 years).

    This local bank is opening up more branches because they have so much demand.

  23. 23
    Gex says:

    Even more insulting is the fact that certain account holders wouldn’t be charged. Basically only poor people should have to pay for the privilege of participating in our economy.

  24. 24
    catclub says:

    @FlyingToaster:
    Also: CheckingFinder

    Input your zip code and it will find the best local deals for you.

    I saw, but cannot remember which media website, an article
    that outlined ( without naming) the Kasasa checking system.

  25. 25
    Renie says:

    Chase was also thinking of following BoA and charging $5.00 but has now stated they won’t.

    Bank of New York Mellon is now charging a small percentage for big customers who keep moving tons of cash among different accounts. These are big amounts cuz BNY Mellon is now only a commercial bank having sold their retail branches to Chase awhile back.

    Wish I had the problem of having too much cash in my accounts.

  26. 26
    lamh34 says:

    On a totally superficial, unpolitical, note, a week from today is my birthday, and I would hope those of my friends and family “moving their money” will be considering moving a percentage of those funds into my account as a present!

    Back on point, I have a question for anyone who have an answer. I would like to open a checking account at a credit union that is not affiliated with my job, but it was my understanding that to open a checking account at a majority of the credit unions, you have to also have “good” credit rating or you would only be able to open a savings account.

    I have no issue with a savings account, but I use my debit card almost exclusively and I rarely use the atm or checks or cash, and honestly, I prefer using debit not cash. Anyway, does anyone know if it is true that you have to have a “good” credit rating to be able to open a credit union account without a substantial minimum deposit?

  27. 27
    Brachiator says:

    I was listening to a tech podcast the other day, and was surprised to hear one of the hosts casually refer to herself as a ninety nine percenter, and to mention in passing that she was moving her account from B of A.

    Despite all the conservative bleating about class warfare, people understand what is going on.

  28. 28
    waratah says:

    @lamh34: Credit union I used required a savings account with maintaing a small balance at all times to have the checking account. My daughter’s credit union requires the same.
    I am not sure about the credit rating for a debit card but I am sure that some might require good account standing.

  29. 29
    OzoneR says:

    @Napoleon:

    I have always banked at smaller local banks. They have always offered better deals then the big banks.

    Possibly, but one thing I learned is that many of those local banks are itching to be a mega bank one day too, or at the very least their CEOs are.

    Case in point; New York Community Bank.

  30. 30
    MattF says:

    One little thing that, somehow, has been forgotten by the big banks… When you, the customer, put your money in a bank, the bank is borrowing from you. You should be coming out ahead in the deal. No kidding. I just can’t imagine why this particular point seems to be forgotten all the time, it’s just weird…

  31. 31
    Not Sure says:

    @gelfling545: But there are a lot more CUs out there who would love to have you. Small local banks, too. Go to HuffPost, and you’ll probably find a list of those which they recommend.

  32. 32
    boss bitch says:

    Now, under proposals being considered by the bank, Bank of America would offer customers new ways to avoid having to pay the fee.

    B of A is full of shit. They do this all time. THREE times I’ve changed/opened/closed an account with them just to avoid a fee. ‘Well Ms. X if you open a_______ with us then you can avoid X amount’. Six or so months later I would see another fee, send another e-mail and given ANOTHER way to avoid that new fee.

  33. 33
    WeeBey says:

    As the years go by I feel smarter and smarter for having kept my original savings and checking accounts with my small hometown bank.

  34. 34
    hilzoy fangirl says:

    I’ve been with U.S. Bank for ten years now and haven’t had any complaints; between a savings account, a checking/debit account, and a credit card, I’ve never paid them a dime in fees. Of course, the instant they threaten to add fees, or I can get a significantly better interest rate elsewhere, I’ll happily jump ship, but for now at least they’re behaving themselves. The virtue of being #5 in a market dominated by the top four?

  35. 35
    Triassic Sands says:

    As usual, when a bank offers customers a way to avoid paying a fee, the less money the customer has, the less likely it is that the customer can avoid the fee. So, the rich will easily be able to avoid the fee, while the poor or near poor will probably have no option.

  36. 36
    Yutsano says:

    @boss bitch: Just to add on to the BofA hate: if you are assessed a levy on your bank account (know for sure this is true on the federal level) BofA charges $100. It gets better. If that account gets released, it’s another $100. They’re not the only bank that does this (Chase does too) but I thought that was a way of piling salt unto the wound.

  37. 37
    cyd says:

    Hmm, I must be the only person who thinks that five bucks a month is not unreasonable for a debit card service.

  38. 38
    Ruckus says:

    @Yutsano:
    That sounds like salt with a side of ebola.

  39. 39
    Ruckus says:

    @cyd:
    Let’s see.
    1. They pay you almost nothing to park your money in their bank and want to charge you to use it. Wait isn’t that like borrowing money from the fed for free and paying it back at 3%? Do you think that’s reasonable?
    2. They already get a fee every time you use your card. From the merchant. It covers all their costs and gives them a good profit. You pay that in higher prices to the merchant.
    3. The $5 is pure profit.
    4. The banks/card companies have fought the use of pin pads for some time because they get even more money from the fees for use of a debt card as a credit card. Which is how the fees are charged if you sign instead of use your pin. So when you use it as a cc (sign) and they charge you a $5 fee they make even more money. And the merchant is on the hook for losses using a card system that is much easier to cheat with a signature than a pin.
    5. So no, it is not a reasonable fee for debt card service.
    6. It is possible that you are not the only one. Why I have no idea.

  40. 40
    Lurker says:

    @lamh34:

    For what it’s worth, here’s my recent (positive) experience with a local credit union…

    My husband has no credit score because he has no debt or credit cards. He was able to open a checking account last month at a local credit union (First Entertainment) despite this. He deposited more than the minimums, but I think First Entertainment needed a minimum of $25 for their Value Checking account and $5 for the savings deposit.

    When the credit crunch happened, First Entertainment did implement a requirement of a credit score of 600 or higher in order to open a personal checking account. However, they have since eliminated this requirement on personal accounts. A credit score of 600 or higher is still required for their business checking accounts.

  41. 41
    darms says:

    I CGAS about the proposed $5/month debt card fee, our balances are large enough they’ed waive it. No I am moving our checking to a local bank because of the $53T in Merrill CDS derivatives moved to the FDIC insured side of BofA last June. Meaning the FDIC picks up the mess when the Euro kabloweeys meaning we taxpayers pick up the tab. F*ck BofA and all who profit from same. “Faster pussycat kill, kill, kill”

Comments are closed.