Those New Debit Card Fees

by anne on October 4, 2011

debit cardBack in 2009 there were new rules put in place for credit card companies, some of which went into effect this year. Although many, including me, felt they weren’t strong enough – I personally think charging anything close to 30% interest is unconscionable – the law did bring some relief to consumers. That meant that the banks that issue credit cards weren’t going to earn quite as much money as they did before. (According to at least one article bank profits over all have been growing by leaps and bounds.)

Now many of the same banks are tacking transaction fees on debit cards. For example, according to a USA Today article, BofA will soon be charging debit card users $5 a month for the priviledge of using their cards anywhere but at a BofA ATM. Other banks are following suit.

Keep in mind that if you’re using a credit card you’re in effect borrowing money which you expect to pay back plus whatever interest. A debt card, on the other hand, deducts the cost of the purchase from your bank account right on the spot. What most of us aren’t aware of is that merchants pay the banks every time you let them swipe your card. According to the same article, the average charge has been about 44 cents.

Starting October 1, however, the fees merchants can be charged is capped at 21 cents – some 23 cents less.

I’m not impressed, not given the profits these institutions are making and how much they’ve cost the country by issuing bad loans and collateralizing them into undecipherable “securities.” (Yeah, I’m pissed and I think you should be too.)

We can protest

This may be a time when lobbyists end up acting on our behalf. Retailers are working together to pass rules that limit these fees, according to the website The Hill.

The best solution is probably to switch banks, or better yet to a locally owned credit union. Until then, call your bank and ask if they are charging you to use your debit card. If they are register a protest.

Contact your congress people and let them know you want this fee-charging practice stopped.


Plan ahead so you can pay with cash – but be sure you know how often you can withdraw cash with your debit card without being charged extra.

Keep your eye on financial news and to those awful notices that come from banks telling us how they’re going to change the rules; if you don’t understand, call and ask.

How are you dealing with the possibilities of increased fees?

Love, blessings and abundance,

Anne Wayman

 

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{ 2 comments }

Lori October 5, 2011 at 1:15 pm

At the moment, my bank reimburses me when I use ANY ATM, independent of which bank owns it. No fees, but who knows how long that will stand?

I’ve long since given up on Bank of America. They instituted some ridiculous fee about four or five years ago and I immediately canceled my business credit card with them. I think they were going from a fixed 11 percent rate to 32 percent if you miss one payment deadline. No way I’m feeding those predators!

anne October 5, 2011 at 5:22 pm

Good… you’ve got what sounds like a good bank… keep an eye on them. 😉

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