Last week, Bank of America announced a new fee of $5.00 monthly for customers to use their debit card. The fee is set to begin in early 2012. This monthly fee will be charged to customers who use their debit card for any purchases during the month. However, if customers only use their debit card to make ATM withdrawals during the month they will not be charged.
The debit card fees will apply to basic customer accounts, which the majority of Bank of America customers utilize. Customers who have certain premium accounts will be exempt from the fee, which was a major point of contention when the fee announcement was released last week. This fee is in addition to other fees that Bank of America currently charges customers. It seems as though the days of free checking and savings accounts are dwindling, and have been replaced with $12.00 money account fees unless customers meet certain conditions one of which is maintaining an average balance of $1500.00.
Bank of America is instating this fee because of a regulation Congress passed at the beginning of this month which limits the amount of fees banks can collect from merchants when customers purchase goods with their debit cards. This regulation does not apply to credit cards though. With the current economy, customers readily rely on debit cards so they do not have to carry large amounts of cash on them and or to avoid spending beyond their means with credit cards. Using debit cards can allow consumers to view their bank balance in real time and can help them understand the amount of money they are spending on transactions. Also, those who prefer using a debit card over a credit card, can avoid late fees and interest payments that are associated with credit cards. Bank of America customers may start using all cash or go back to writing out checks for their purchases in order to avoid these fees.
With protesters on Wall Street and even President Obama speaking out against the fee, Bank of America could lose customers come the new year. Customers may chose to take their business to other banks who are not imposing the debit card fees. Others may switch from a bank to a credit union, if the debit card fees become a trend that all the big banks are going to follow. On the other hand, many customers will remain with Bank of America because they may feel that the hassle of closing their accounts, and opening new ones at a different financial institution is all not worth $60.00 a year. Also, many customers may already have direct deposit and automatic bill pay set up with Bank of America, so they will end up simply choosing to ignore the fee and pay it each month. Although it may inconvenient at first to switch banks, there are thousands of other banks in the United States and if another bank is not charging fees for debit cards, you can go there. Today, people shop around from everything to books, clothing to cars, so why not shop around when choosing where you bank.
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