Bank of America and its $5-a-month debit-card fee

In response to a new federal law limiting the hidden fees that banks can charge for using debit cards, Bank of America has announced that next year it will charge $5 a month to consumers who use its debit card to make purchases. SunTrust is expected to follow suit, as are other banks.

By some, this will no doubt be seen as another example of well-intended federal regulation with bad consequences. It’s quite the opposite. In fact, conservatives ought to love the change because it enlists market forces, not the government, in protecting small business and consumers.

A quick review: Every time a consumer uses a debit card to make a purchase, the business accepting the card is forced to pay a processing fee to the bank. The previous maximum of 44 cents per swipe was far more than it cost banks to handle the transaction, which meant it was also a significant source of profit. Even better, because the fee is hidden from consumer view, banks felt no competitive pressure to lower it.

Under the new rules, the maximum fee has been cut from 44 cents to 21 cents per swipe, plus .05 percent of the purchase price. The upfront monthly fee announced by Bank of America and other banks in intended to offset that revenue loss, they say.

Great!

Suddenly, the fee that had previously been hidden from consumers is now upfront. Now consumers have a more information about what they’re actually paying to use the card, and they can make decisions accordingly.

In this case, Bank of America is facing a significant consumer backlash over its fee annoucement. Other banks have announced monthly fees of $2 or $3. Credit unions and community banks are less likely to charge the fees, and Citigroup has announced it won’t charge such a fee at all because it would be “a huge source of irritation” to customers.

“We conducted extensive surveys with our customers, and no one wanted to pay to use debit cards,” Citibank retail banking chief Stephen Troutner said.

In other words, competition!

This is not the end of “free checking” or “free debit cards,” because as Muddy Waters taught us, you cain’t lose what you ain’t never had. You were being charged for it anyway, although you had almost no idea how much or even by who. Now you know.

If Bank of America charges you $5, but Citigroup charges you nothing, where will you take your business?

Banks don’t like the rule because it empowers consumers and reduces if only slightly the information imbalance between bank and individual. It forces the market to work more efficiently.

– Jay Bookman

270 comments Add your comment

hobby

October 3rd, 2011
8:32 am

won’t affect me—-don’t use ‘em
first

Keep Up the Good Fight!

October 3rd, 2011
8:33 am

Great explanation Jay….. wonder if there will be real comprehension… Let the Warren rants and other nonsensical rants begin

Doggone/GA

October 3rd, 2011
8:35 am

hobby – same here. Now when will they apply the same logic to credit cards?

Aquagirl

October 3rd, 2011
8:36 am

Bank of America has been spinning this like a top. “Oh woe is us, the evil over-regulation is making us charge consumers more! It’s the government’s fault!”

Why anyone would buy this is beyond me. It’s like trusting a used car salesman. Or Dick Cheney.

MountainMan

October 3rd, 2011
8:36 am

Just another reason not to use a debit card. Costs too much and too much fraud exposure. BOA customers should fight back by writing more checks. It should cost more to process them than electronic transactions, plus you get the float.

Granny Godzilla

October 3rd, 2011
8:36 am

Why in heavens name would I even consider doing business with Bank of America?

Precious

October 3rd, 2011
8:37 am

CitiGroup here I come!!

Mick

October 3rd, 2011
8:42 am

Luckily, (for once) my debit card is with shytty bank errr. citibank…

stands for decibels

October 3rd, 2011
8:43 am

conservatives ought to love the change because it enlists market forces, not the government

ha ha ha.

Jay kids because he loves!

carlosgvv

October 3rd, 2011
8:45 am

Jay, you are barking up the wrong tree here. The real issue is not federal regulations with bad consequences It is the fact that, one way or another, industries like airlines and banks will find ways to increase their profits at the expense of their customers and there is little, if anything, the public can do about it. Needless to say, other idnustries will or already are doing the same. The medical industry is a good example. Runaway greed is in the saddle and rides us all. Don’t expect any help whatsoever from your elected lawmakers.

kayaker 71

October 3rd, 2011
8:46 am

I use a debit card for most every purchase I make. They are convenient, accumulate no balance to later pay off and keep my spending in check. If I don’t have it in the account, I don’t spend it. They are the biggest bargain on the block. I am much more upset about ATM fees that most every bank charges to withdraw cash from your account….. most places $3 a pop. That’s highway robbery.

Mineless consumer

October 3rd, 2011
8:48 am

I am and will stop using my Debit Card if such a fee does see light of day..I wonder if its going to cost the bank more to process debit card purchases or hundreds of checks a month, just from my account..Check cards were introduced to help with the burden of processing millions of checks, now they want to sink that vessel..Good luck

MountainMan

October 3rd, 2011
8:50 am

Kayaker,

Go to Publix. They don’t charge ATM fees. Your bank might, but not on the front end.

Peter

October 3rd, 2011
8:50 am

I don’t have a bank card, and it drives the folks at my bank nuts…..I love it myself, and yes you will have to wait longer in line as I sign my check.

I can’t wait to go to my local bank and tell then this is exactly why !

Hunter S Tomboy

October 3rd, 2011
8:52 am

It’s just so hard to stuff my checks into those automated gas pumps…

George P. Burdell

October 3rd, 2011
8:52 am

How can you call it market forces when there is a limit to how much they can charge? I don’t disagree about the $0.44 being more than it costs to process a transaction but limiting the price charged is not market forces at work. If you want to truly make it a market driven process, make the receipt include a line item that shows transaction fee where the customer is paying it directly. That will change behaviour and introduce competition.

Aquagirl

October 3rd, 2011
8:52 am

Oh, and Jay….great column! I had vague thoughts about how the banks were simply po’d their debit-card scam was busted, but you really laid it out on the table in clear terms. Bravo.

Now if only you could have squeezed in a chart…..

Hunter S Tomboy

October 3rd, 2011
8:52 am

Enter your comments here

jm

October 3rd, 2011
8:54 am

As liberal loved Warren Buffett said: if people don’t like the $5 fee, they can go to another bank.

Gale

October 3rd, 2011
8:55 am

I expect this to be a wash for most businesses. Some people will stop using debit cards and the business will get to pocket more of the swipe fee. I am quite sure they will not reduce their prices. I have never used a debit card because of the exposure. I prefer cash. Like Kayaker says, If I don’t have it, I don’t spend it.

TaxPayer

October 3rd, 2011
8:55 am

I get cash back and pay no monthly fee or annual fee or interest because I pay off the credit card balance every month. Of course, businesses tack on extra to cover the charges they incur so it makes sense to just charge everything since I have to pay for the service.

jm

October 3rd, 2011
8:58 am

Only low balance people are going to be hit with this fee. And low balance people are going to be hit with a fee no matter where they go.

Gale

October 3rd, 2011
9:00 am

Also agree with TaxPayer. My credit card is better than a debit card. I use it for everything that exceeds the cash in my pocket and pay it off monthly. There is no annual fee and there is a rewards program.

Fee'd up!

October 3rd, 2011
9:00 am

The real heart of the matter is that the banks got caught with their hands in the cookie jar (again) and were found to be unjustly profiting by the fees. So, an adjustment to those fees was made by the regulation. The banks, quite accustomed to these ill-gotten gains, have decided to continue to reap this reward by simply changing the way in which they acquire it. They have chosen the path of least resistance. After all, there are no lobbyists for the consumer, so why not just fee them somemore.
In the end the banks hope that public outcry will repeal the Consumer Protection Act or at least some provisions of it and restore those swipe fees. Then, they get those fees back PLUS the new debit card fees that they imposed to make up for the reduction in swipe fees. It’s what they pay campaign contributions for!
I think we need to do away with this TBTF mentality. It makes these banks think they can do whatever they want to do because they know the government will save them. How about we replace TBTF (Too Big To Fail) with TBTE (Too Big To Exist)???

Jimmy62

October 3rd, 2011
9:00 am

The real issue is that Wal-Mart was able to influence politicans using the lure of money and power to pass this law, which forces other businesses to alter their business decisions once again do to government intervention.

This comes down to another case of punishing success and rewarding failure. Banks can’t make as much money off late fees and overdraft charges and transactions fees, so they have to get the money from people who aren’t late and don’t overdraft.

If we want the US to continue to be great, we have to stop rewarding failure and punishing success. People, whether they are bankers who helped cause the housing fall, politicians who voted on legislation based on which big company paid them the most, and citizens who spend more money than they earn, need to face the consequences of their actions, not be protected and insulated from them.

Paul

October 3rd, 2011
9:02 am

If it’s assessed to the merchant, whether as a fee per swipe or a percentage, and not levied directly on the cardholder, most cardholders won’t care. They will not see it as a cost to use the card because they aren’t paying.

jm

October 3rd, 2011
9:03 am

Perry hunting lodge thing is going to be a big deal…..

AmVet

October 3rd, 2011
9:04 am

Loved the early morning blues, Jay. Apropos for the topic.

I cannot tell you how much I’m looking forward to firing the criminally tainted BoA. (Some years ago they swallowed up one of the community banks I used and I’ve been a refugee ever since.)

The corporate destruction of capitalism rolls along, but not quite so merrily, huh? In spite of willful stupidity and craven blindness along our right flank, we the people have some courage.

People like Elizabeth Warren, Ralph Nader and plenty of others are gonna hold these quasi-fascistic “monied powers” feet to the fire. And I do love the smell of burning crooks!

Thousands of protesters from all walks of life – school teachers, professionals, union members, college students, housewives – have finally taken on the Welfare Kings of Wall Street and elsewhere and this has the self-destructive neo-cons in a real dither now.

Why can’t these dregs of society (per La petit caporal) just take the growing abuse like the plutocracy-enabling sycophants and corporate toadies do???

And as is their wont, they pay ZERO attention to the message – the message of vast destruction of American families and the rape of the Middle Class – they just obsess over the messengers themselves.

Get used to it, neo-cons. Just like with man-made climate change and many other topics you will come out on the losing side of history.

It’s the Republican thing to do…

Gale

October 3rd, 2011
9:04 am

You know, I don’t mind the banks charging for actual movement of money. I do tire of my bank trying to sell me insurance, home maintence packages and what not.

rann

October 3rd, 2011
9:04 am

You forgot to mention, Jay, that BOA stands to make a couple of more billion with this sceme than they were they charged more for processing. this is a lot like what credit cards used to do and some still do: Charge a membership fee of $35 to $60 a year for the privilege of being charged usury interest rates. Write more checks! But, the banks will push, like they did in Britain to do away with checks. In Britain and some other European countries, checks are a thing of the past.

Good little liberal

October 3rd, 2011
9:05 am

Leave it to BOA to be the first to raise their fees. If they closed tomorrow, I would party like its 1999.

They are the worst bank in the country. If anyone is still with them, you deserve everything that you allow them to do to you.

Aquagirl

October 3rd, 2011
9:07 am

Then, they get those fees back PLUS the new debit card fees that they imposed to make up for the reduction in swipe fees.

Oh, I’m sure banks will do like the ruggedly independent non-subsidized airlines. When the government tax expired they didn’t charge passengers an equal amount…….oh wait, they did.

Waheema

October 3rd, 2011
9:07 am

Must….defend…Obama…no…matter…what…

We had a financial meltdown in this country becasue banks were not required to keep enough captial in reserve and the democrats passed a law that causes debit card fees and creates 13 more affirmative acftion councils. Typical.

Guess who big bankers supported in the last election?

Obama.

Guess who the Obama Administration is trying to stamp out?

Community banks.

Coincidence? I think not

kayaker 71

October 3rd, 2011
9:08 am

Most credit cards, in general, are a rip off. I I make a purchase on, say, Oct 3rd and their billing date is on the 27th of Oct, they seem to tack on interest for the balance. And the yearly user fees are as much or more than the 5/mo charge for debit cards. Sears was the worst for this practice…. quit using Sears credit cards long ago. For those poor slobs who accumulate a whopping balance on the card, like many, they pay through the nose. For some purchases, ie 6mo no interest purchases, it give the consumer a chance to pay off a large item over a period of time without interest charges. But when it comes down to managing your money, cash or a debt card is certainly the best way out.

poison pen

October 3rd, 2011
9:09 am

Capital one pays back 1.25 % on all purchases with no yearly fee. Why would I want to use a debit card?

Jay

October 3rd, 2011
9:09 am

So, Waheema, I take you are trying to imply that the big commercial and Wall Street banks support Obama?

If so, that’s pretty funny.

jm

October 3rd, 2011
9:09 am

Jay, of note, you may think it’s just about “hiding the fee”. It isn’t.

The benefit people get from a debit card are directly correlated with how much they use. Therefore, a per use fee makes more sense than a flat fee.

In other words, you think it may introduce more competition. Instead, the Feds have just made the market more inefficient.

Guy Incognito

October 3rd, 2011
9:09 am

Jimmy Shoots and Scores!

jm

October 3rd, 2011
9:11 am

“I take you are trying to imply that the big commercial and Wall Street banks support Obama?”

2008 campaign contribution data supports Waheema’s statement.

Strawman

October 3rd, 2011
9:11 am

“Banks don’t like the rule because it empowers consumers and reduces if only slightly the information imbalance between bank and individual. It forces the market to work more efficiently.”

Wow, Jay. I think I need another cup of coffee. Mondays can seem surreal at times, but I am not sure I am yet awake.

In the end, of course, all taxes and fees are paid by individuals. The taxes imposed upon corporations are simply passed along to the consumer.

Robert F. Sanchez

October 3rd, 2011
9:11 am

Only in the mind of a liberal are price controls imposed by the federal government an example of “market forces.”

Cube-Newton

October 3rd, 2011
9:12 am

Why is “me” paying $5 per month better, than when the cost was paid by the retailer. Not sure what the hub=bub is though, banks, like any business, must price their line of products to make a profit. If they don’t charge it “here”, they will need to charge it “there”.

hdhd

October 3rd, 2011
9:13 am

Closing my BoA account. They make plenty of money off of me through the hundreds of swipes I make a month. INGDirect. Free.

Granny Godzilla

October 3rd, 2011
9:13 am

Waheema

My oh my….I guess that’s way he shifted 30 Billion (with a B) of TARP funds to community banks….he can stamp me ouy like that anytime!

poison pen

October 3rd, 2011
9:14 am

Jay

” So, Waheema, I take you are trying to imply that the big commercial and Wall Street banks support Obama?”

If so, that’s pretty funny.

Jay, Are you saying that they didn’t give money to Obama’s election???

Denyse

October 3rd, 2011
9:16 am

I am with the dastardly BofA. Because my mortgage is held by them I am considered a “premium” member and, thus, will not be charged the monthly fee for use of my debit card. However, it that were not the case, I’d be taking my banking business to my credit union. I never carry cash. Using my debit card is very convenient, but I’d be okay to start writing checks again, too.

Good little liberal

October 3rd, 2011
9:16 am

AmVet

Are you sure its the Republicans that pander to BOA?

Did the DNC Get an Illegal Campaign Loan from Bank of America? (PJM Exclusive)
http://pajamasmedia.com/blog/did-the-dnc-get-an-illegal-campaign-loan-from-bank-of-america-pjm-exclusive/

Bailout amounts

Bank of America received $45 billion[64] in direct government aid from the TARP program, and a further $118 billion worth of guarantees against bad assets[65].
Use of bailout funds for lobbying
After receiving government funds, Bank of America continued to spend millions of dollars to lobby Congress, including to “fend off restrictions on executive compensation, home mortgage lending and credit card fees” as well as in opposition to the Consumer Financial Protection Agency[66]. They also hosted efforts to defeat the Employee Free Choice act[67].
http://www.sourcewatch.org/index.php?title=Bank_of_America_Corp

Note that they spent TARP money to lobby Congress during the two years that the Democrats controlled both houses.

bank

October 3rd, 2011
9:17 am

The issue here is that the Bank catered to our illegal friends and they are reaping the consequences.
They are the worst in customer service and not doing what the customers want with regards to their accounts.

jm

October 3rd, 2011
9:17 am

Cheney(s) v Obama.

Praise on DADT and drone strike. Criticism on Obama’s rhetoric and BS criticism of the former administration.

http://www.politico.com/news/stories/1011/64944.html

Kevin

October 3rd, 2011
9:18 am

Must….blame….Obama…no….matter….what

Tell me again which party it was in power when Glass-Steagall act was repaealed removing fiancial regulation which led to this whole mess we’re in today? Who has been for wholesale deregulation of everything for the last 30 years?

Coincidence? I think not.

too little time

October 3rd, 2011
9:18 am

And here is what was truly bogus about those fees….

When a business pays those fees, the costs get spread around to all consumers even if they use cash to pay for goods. That means that cash-paying customers subsidize the credit card/debit card customer purchases.

Anyone who says, “I pay no fees” doesn’t understand how credit/debit cards work in our society. Everyone pays those fees.. it is hidden in the price of every item.

Denise

October 3rd, 2011
9:19 am

MiltonMan

October 3rd, 2011
9:20 am

How about telling the whole story? It only applies to banks with over $10 billion in assets. My credit union will not be charging me anything to use a debit card.

And also if consumers did not know about the hidden fee – same on them. Consumers need to educate themselves on using credit – any form of credit. Knowledge is power!

ty webb

October 3rd, 2011
9:20 am

Jay,
are you live blogging from one of those pitiful “occupy wall street” get togethers?

Jay

October 3rd, 2011
9:20 am

No, poison, I am NOT saying that.

I’m saying that despite what Wall Street gave Obama in 2008, Obama as president has taken several policy steps opposed bitterly by the banking industry and they are unlikely to support him this time out. They are gravitating toward Romney instead. http://articles.latimes.com/2011/sep/30/business/la-fi-obama-wall-street-20110930

I will also recommend an interesting story in Politico, documenting Wall Street’s targeting of Elizabeth Warren as a threat to be confronted and eliminated.

http://www.politico.com/news/stories/0911/64872.html

Good little liberal

October 3rd, 2011
9:22 am

Jay

Are you saying that WallStreet and BOA do not pander to Obama?

Obamas Top Supporters:

http://www.gather.com/viewArticle.action?articleId=281474977263615

Goldman Sachs Number 1

Lehman Brothers number 3

JP Morgan Chase & Co Number 5

Citigroup Inc Number 7

Also note that number four is National Amusements Inc, the Casino industry.

1811/0311

October 3rd, 2011
9:22 am

Oh, this morning Jay is a capitalist who supports a socialistic administration.

Interesting.

Mineless consumer

October 3rd, 2011
9:22 am

Whats next? Possibly fees for online banking? Banks are just like casino’s, the odds are always with the house..

Steve From Dalton

October 3rd, 2011
9:23 am

The Frank-Dodd “Consumer” protection bill is behind the increase in card fees. The bill cut in half the amount that a bank receives on each sale. The Banks have to make up the money so they charge the card holders. Once agian big Goverment ends up leaving the middle class holding the bag.

jm

October 3rd, 2011
9:24 am

BlahBlahBlah

October 3rd, 2011
9:24 am

This “outrage” over 17 cents a day is amusing.

jpenrod

October 3rd, 2011
9:24 am

Jay, this is the best explanation I have seen for where this fee is coming from, but to me it raises more questions. You imply that the fee was already being paid by the consumer “You were being charged for it anyway…”but you also make it clear that the previous fee was charged to the merchant, “…the business accepting the card is forced to pay a processing fee to the bank.” By reading that I am forced to assume that the merchant was passing the charge on to the consumer by way of higher mark-up on the product. If this is the case and the merchant is no longer paying the same fee will the savings be passed on to the consumer? If the answer is no,as I suspect the answer will be no, the consumer is no being charged twice for using the debit card. If you tell me that the merchant was not passing the charge on to the consumer in the form of higher mark-up then your statement that the consumer was being charged for it anyway is misleading. I am not trying to nit pick your article, as I said it is the best explanation I have seen for the new fee, but with more information more question arise. and more to the point I do not see how this protects the consumer, as they seem to be the only ones seing an increase in expense and no change in income. The merchant who previously was being charged the fee now makes more money on each transaction, the bank is covering their potential loses with extra fees and the the consumer now has to pay a fee to use a debit card, use and atm that is not linked to their bank, go in to see a teller, or in general access their own money.

Lynn

October 3rd, 2011
9:24 am

Once again, I’m thankful to belong to a Credit Union.

1811/0311

October 3rd, 2011
9:24 am

Headline: “Roseanne Barr: Behead Bankers, Rich Who Won’t Give Up Wealth”

Is this a liberal promoting violence ?

kayaker 71

October 3rd, 2011
9:25 am

Bookman,

Bozo financial contributions from financial institutions in 2008 campaign….

Goldman 1,013,000
JP Morgan 808,000
Citigroup 736,000
Morgan Stanley 512,000
UBS AG 532,000

Granted, these contribution were not made my the institutions themselves but by their PACs, employees, owners and owner’s families. Boils down to the same thing. BTW, these and many other financial institutions make nearly 15B in profits in the last quarter. Bozo is my buddy……..

jm

October 3rd, 2011
9:25 am

Elizabeth Warren is loco

JohnnyReb

October 3rd, 2011
9:27 am

The transaction fee is charged retailers. You won’t see them lowering prices because that fee goes down. The end result of this government tampering will be a new bank fee charged customers with the price of goods unchanged.

jm

October 3rd, 2011
9:27 am

BlahBlahBlah indeed

The same liberal hot air balloons will spend that much every day at their beloved Starbucks.

AmVet

October 3rd, 2011
9:27 am

“We had a financial meltdown in this country becasue (sic) banks were not required to keep enough captial (sic) in reserve …”

Preposterously absurd.

And not remotely close to the reason…

Marie

October 3rd, 2011
9:27 am

The same way I can leave big banks and not pay the monthly $5 fee (since I am a Bank of America customer); these retailers could have also chosen not to run their business without the use of debit cards. The difference is that as an individual I will not be calling my local US rep or US Senators whining that the BOA should not be hitting me with this fee. If I don’t want to pay it I will either not use the debit card any longer or move on another bank.

I patronized several small business (primarily restaurants) that forced customers to purchase a certain amount if they wanted to use their debit card and others would not accept them all. Yeah these debit cards are convenient, however, commerce existed in this country prior to their inception and we can make whatever adjustments required without government intervention. Will they now force banks and/or credit unions to stop charging a monthly usage fee when consumers come whining (which they eventually will) about paying it?

jason

October 3rd, 2011
9:29 am

did you mean to say 0.05 percent? …because that’s actually 0.0005 multiplied by the total. I’m not sure that’s right; 5 percent would be 0.05.

Buck Hayek

October 3rd, 2011
9:29 am

Geithner turned the Bush TARP loans to Bank of America into a $4.5 billion profit for taxpayers.

http://projects.propublica.org/bailout/entities/27-bank-of-america

Obama’s DOJ fined Goldman Sachs $550 million. There is NOTHING less free market than Bush’s TARP in US history.

Well, maybe Nixon’s Wage and Price Controls – another Bush type statist.

dinkdunk

October 3rd, 2011
9:29 am

Anything that hurts the Bank of Amigo is good news in my opinion.

ralph

October 3rd, 2011
9:30 am

C’mon, 5 bucks a month, that is what, 60 bucks a year. I would be angry if it was $5 per transaction, but 60 bucks a year. I don’t like everything about BOA, but 60 bucks a year to use my card, is not that bad.

Paul

October 3rd, 2011
9:31 am

“This “outrage” over 17 cents a day is amusing.”

The line used by salesmen everywhere. Or children. “But mom, it’s only fifty dollars.

This is only pennies a day. That is only a dollar a day. Annualize all those ‘onlys’ to see what you’re paying. Now multiply by all the households in America.

But it’s “only” your money.

Gary

October 3rd, 2011
9:31 am

Only question is . When does it stop. Checking Acct. fees , then a fee if you tranfer funds from savings to checking more than 3 times a month and now a fee for using part of your checking acct. ATM, that you can not have unless you have a checking acct. that you are paying a fee for.
So Bank of America is getting as much as $23.00 a month for using your checking/savings that you pay $12.00 a month to have.

fes

October 3rd, 2011
9:31 am

My problem with it is that they think they are entitled to a certain profit amount. I understand that they’re in business to make a profit and they’re doing that even without the monthly fee. They just want MORE profits and at OUR expense. No thanks. I’ll switch to a straight ATM card and the next time they do something stupid to alienate their customers, I’ll probably make the switch back to my credit union. I’m done with this nickel and diming BS.

Mighty Righty

October 3rd, 2011
9:32 am

I don’t understand the big deal. Using a bank is a choice. The consumer is free to decide which ser if any thy desire and whether of not the price is worth it.

Blue

October 3rd, 2011
9:32 am

For once I agree with you, Jay. And for those complaining about fees from ATM’s, use the Dave Ramsay principle; pull out “X” amount of money for groceries, entertainment and miscellaneous and pay cash.

Gordon

October 3rd, 2011
9:33 am

” In fact, conservatives ought to love the change because it enlists market forces, not the government, in protecting small business and consumers.”

Huh? How does that, correlate to this:

“Under the new rules, the maximum fee has been cut from 44 cents to 21 cents per swipe, plus .05 percent of the purchase price.”

I understand the prices of what is being purchases may drop because businesses don’t have to pay as much to the bank, but as a consumer I was aware of what I was paying for both the debit card and the product I was purchasing. This is a solution in search of a problem.

jm

October 3rd, 2011
9:33 am

Inflation-adjusted spending per student in the United States has nearly tripled since 1970. According to the Organization for Economic Cooperation and Development, we spend more per student than any nation except Switzerland, with only middling results to show for it.

http://online.wsj.com/article/SB10001424052970204226204576601232986845102.html

Paul

October 3rd, 2011
9:34 am

“Is this a liberal promoting violence ?”

Scout, why do you keep going back to that? Pres Obama, our libprogressivesocialistMarxist president already ordered the killing, not capture, of bin Laden and al Awlaki.

That’s about as violent as you can get, eh?

Keep Up the Good Fight!

October 3rd, 2011
9:34 am

Hmmm.. I am sure BoA is pandering to Obama…why here is the video of the BoA executive promising all that support to Perry…..wait a minute….

Nikki D

October 3rd, 2011
9:34 am

Great article. Thanks for the heads up. However, I think I will be opting for the free debit card use myself. BOA has enough fees without adding this one. So I think I will be looking to change banks. SMH

RB from Gwinnett

October 3rd, 2011
9:34 am

Wouldn’t it be awesome if government agencies had to disclose their costs and were forced to compete due to market pressures too? Then maybe it wouldn’t cost 40% more to send something through the USPS than it does through UPS/FedEx and the lines at the DMV would be half as long with half the staff.

lily

October 3rd, 2011
9:35 am

Chase freedom has 5% cash back,no anual fee and a yearly cash back of 440.00 and all chase debit cards are free. I will go to JPMorgan Chase

Adam

October 3rd, 2011
9:35 am

Aquagirl: Why anyone would buy this is beyond me.

The bottom line is this:

People have preconceived notions of government and corporations, and a desire to choose sides (in most cases). So, if you land on the side of pro-corporation, apparently that means you need to be as anti-government as possible (for some people). Perhaps it is more basic, but it seems to be – Government BAD, corporations GOOD, therefore whatever the corporation says will be trusted over anyone else. Ergo, Bank of America is being put upon, and the government is evil. Since the person already believed the government was evil, this is the only way to make sense of it. It’s a continuance of a pre-existing belief.

Good little liberal

October 3rd, 2011
9:35 am

Marie

Your still being with BOA is you supporting all their criminal behavior.

Join a credit union. Yes. I know. Everyone told me the same thing for years and I stuck with a megabank. (I dropped BOA after I had been with them for 14 years because they had begun to hold every incoming check for ten days, even though I had never deposited a bad check in 14 years)

When I left BOA, I left $100 bucks in my account to cover anything outstanding. There wasn’t anything outstanding, but when I returned to two months to close the account, their fees had eaten up the 100 bucks and I still owed them $85. Start checking your bank statements very closely.

I now check my statements from my credit union and money is actually added because of interest on my savings and checking. I’ve taken out two 90 day loans without any problem and they have been great. BOA sucks.

AmVet

October 3rd, 2011
9:35 am

So Warren’s loco. huh, jm?

Make your case.

Then I’ll make mine and intelligent people can decide who is the more correct.

Or play it safe and don’t.

Jason

October 3rd, 2011
9:36 am

RIGHT WING TALKING POINTS… Bank Of America and the rest of the right wingers like to blame regulations for everything. But last time I checked we had less regulations during the Bush years, and look at what happen. This fee is ridiculous. They are trying to get out of debt from those bad loans and deals they did with greedy investors. Sadly, on the backs of the consumers.

There is light at the end of this tunnel. Maybe just maybe people will rebell and not use their cards at business. This will cause people to save more, and less money is going into the pockets of businesses. Businesses will then complain, and BOFA will change their minds about this fee.

Every action deserves a calculated and smart REACTION…

Adam

October 3rd, 2011
9:37 am

kayaker: I am much more upset about ATM fees that most every bank charges to withdraw cash from your account….. most places $3 a pop. That’s highway robbery.

Completely agree. That’s nonsense, and ends up costing the user over $5 for a SINGLE transaction. It’s absurd. Used to be not such a big issue if you didn’t need cash, but sometimes you still do! The worst part to me is this is now considered part of their regular revenue and profit margin, and if they get THAT regulated, they’ll screw the consumer some other way to make it up.

Good little liberal

October 3rd, 2011
9:37 am

Keep Up the Good Fight!

I was referring to their support of Obama during the presidential race.

After what Obama has done to the economy, there aren’t many businesses left that still support Obama, except maybe Soros.

jm

October 3rd, 2011
9:38 am

Amvet – she wants to eliminate the availability of products that people readily need and use. that’s crazy

Kinda like: hey, you don’t need meat, its bad for the environment. you now get to live on cup of rice a day and a bowl of lettuce. good luck and adios

Joe the Plutocrat

October 3rd, 2011
9:39 am

the more audacious move is the recently introduced legislation to allow struggling homeowners to access IRA/401K to pay off (banks) mortgages. take your retirement funds and divert them to OTHER (even less profitable) investments. by all means, we need to prop up the banks; too big to fail… and all.

Keep Up the Good Fight!

October 3rd, 2011
9:39 am

The Soros boogeyman…. they put that in every blog!

Good little liberal

October 3rd, 2011
9:39 am

Jason

:But last time I checked we had less regulations during the Bush years, and look at what happen. ”

A low unemployment rate. Yes. That’s awful.

Good little liberal

October 3rd, 2011
9:40 am

Keep Up the Good Fight!

So do you think that Soros is a good guy?

Road Scholar

October 3rd, 2011
9:40 am

When will they start charging us to get cash out of our accounts?

Should the members of BOA storm the counters of BOA and stand in line to get cash so that BOA must hire more tellers? Won’t that increase their costs? Dumbasses!

The last time my bank tried to raise fees, I asked them that, since we have 5 accounts (most non interest bearing) a home mortgage and a 2nd mortgage, how much of my money do they have to handle to get free fees? W/o hesitation, they made all accounts free!

jm

October 3rd, 2011
9:40 am

California and Bust (by Michael Lewis, the moneyball guy, among other things)

http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111

great read

Dave Ramsey's Biggest Fan

October 3rd, 2011
9:40 am

pull out “X” amount of money for groceries, entertainment and miscellaneous and pay cash.

Or, just mug the guy/gal who carries around all that cash.