STOP WHINING ABOUT THE NEW DEBIT CARD FEE!
Well, Bank of America thinks that you should just accept it and they are about to introduce a fee increase. Soon, Bank of America customers will have to pay an additional $5 a month in order to make purchases with their debit cards.
Debit cards have become more and more popular over the past decade, and millions of people use their debit card as their primary means of payment. Only a relative few rely on cash in this day and age. Many people have their paychecks deposited directly into their bank accounts.
While many of us use credit cards for large purchases or repeat purchases like gas or groceries, the ever present threat of going into debt combined with high interest rates has lead many people to rely on their debit cards. In fact, many people can hardly imagine using anything else since debit cards and banks accounts are tied so closely together.
In many situations, it is very smart to use your debit card for your purchases. Especially since, in the past, you have not had to worry about paying an extra fee for using your debit card. Most importantly, your debit card only accesses the funds that you have. This helps you stick to your budget, and it keeps you from spending beyond your means.
Many people, who have had problems with debt in the past, now use their debit card exclusively and do not have a credit card, except for emergencies. This is only one example of a recent move by banks to create and increase their fees. This trend is likely the result of the Feds capping the fees that banks can collect from the use of debit cards. Every time you use your debit card at a store, the bank collects a fee from the store. The amount of money that they can make per transaction has been limited to twenty-four cents, which is about twenty cents lower than the previous average amount.
Many of use groan at all the other fees that banks typically charge. You’re out of town, and you have to use a different ATM. This means that you will likely have to pay $2 to $3 in order to withdraw money. Your bank might charge a minimum balance fee, meaning that you will be charged when your balance drops below a certain amount, such as $1000. This is usually a monthly fee so you are often charged each month that your balance is low or sometimes each time your balance goes below a certain limit.
Wells Fargo, for example, recently created a minimum balance fee of $7 a month if your balance goes below $1500, and you do not have at least $500 in direct deposits each month. If either of those conditions is met (a balance above $1500 or $500 or more in monthly direct deposits), you do not have to pay the fee. Not to mention one of the most dreaded charges associated with bank accounts and debit cards—the overdraft fees.
We’ve all been there before. That check we thought had cleared, really hadn’t, and that small purchase we made caused us to overdraw our account. What’s worse, you can accidentally rack up multiple overdraft fees in a short period of time, if you are not paying attention. Once a friend bought a pack of gum, less than a dollar, and got a $40 overdraft fee as a result. The fees that your bank charges can be annoying, and for many people they are often unexpected because very few of us dig through the fine print associated with our bank accounts.
Many of us would prefer a simple and easy to understand bank account, but this is becoming less and less common. Many people are choosing to open accounts with local or regional banks because they often charge less fees than the larger national banks. However, they present their own problems especially if you travel often. Bank of America will likely lose customers as a result of this change, but some people will not care. In reality, for many people, $5 is not that much, but for those people who struggle to pay the bills each month, this is just another added and unnecessary expense.
It’s the principle of the thing as well. Even if $5 is not a great deal of money, it’s the idea that Bank of America (and others) wants to nickel and dime their customers to death. Big banks already come across as greedy, money grubbing institutions, and now Bank of America is leading the way in charging for what used to be part of the package. Even if they have to charge, what about one small fee to cover everything, such as the debit card, the minimum balance, the maintenance of the account, and overdrafts. That would certainly appeal to me over the seemingly random small charges.
Nonetheless, before you decide to keep all your money in your mattress or buried in a mason jar, you should take a little time to research new banks. Ally Bank, for example, does not charge ATM fees, monthly maintenance fees, or minimum balance fees. As of now, they do not charge for you to use your debit card either, and they might be a good fit for you. You might want to take a look at some of your local banks as well to see what incentives they offer to people who open an account with them. Change is not always a bad thing.
If you are with Bank of America, will you change banks to avoid a $5 fee? Leave a comment below specifying how you will respond to a mandatory debit card fee.