Debit Card Fees by the big Banks may be Just What the Doctor Ordered

While thousands of angry people across America are joining Occupy Wall Street and its nationwide clones, Bank of America seems oblivious to the upsurge. Here’s how it works: If you use your debit card during any month, your account is debited five bucks for that month. If you don’t use your card, there’s no penalty.
The banks are saying they are forced to raise fees because of all the new restrictions on them. The most relevant rule, which went into effect on October 1, restricts the amount banks can charge retailers for debit card transactions to 21 cents. That’s down from 44 cents.

Even the Pentagon has a credit union!

Ohhh, poor banks! Chase Bank and Wells Fargo are testing $3 monthly fees. Sun Trust is jumping on the $5 bandwagon.
Good! Good? The Consumer Guy® likes bank fees? Nah. But I do like the idea that the big boys are making the small ones more appealing. I closed two Chase accounts last year and moved the dough over to the financial institution where The Consumer Gal keeps her money (yeah, we know, it’s strange that a couple has independent solo accounts) – a Credit union across the parking lot from Chase. Now these accounts are subject to virtually no fees. Citibank is standing pat with no debit fee as well.
In case you do not remember, the big banks are partly responsible for the meltdown of the U.S. economy, no small part of which had to do with bad mortgages. Then they took massive bailouts from U.S. taxpayers, only to deny hundreds of thousands of needy homeowners a break on their mortgages. So it warms the cockles of my heart, whatever they may be, to know that as the banks are finding an array of fees with which to hit their depositors, they are also giving those customers an incentive to say hasta la vista, and to look for better deals at local banks and credit unions.
It’s my hope that bank depositors will be willing to look at local financial institutions for free – or at least low cost – services. In other words, support local businesses. Just make sure they don’t charge other fees, like checking account or teller fees.
Here are some other ways to save on debit card charges.
• Pay cash. Just make sure that you extract the money from an ATM that doesn’t charge a fee. Either use your own bank’s ATM or one on its no-fee network.
• Use a credit card, but only if you pay off your entire bill each month. If you carry a balance, that’s costing you interest each month and makes credit purchases impractical. For information on choosing credit cards with the best benefits, do a web search for ‘best credit cards” – avoiding search results paid for by credit card issuers – and decide if you want money back, airline miles, or whether you want to pay an annual fee for expanded benefits.
• Try online banking. I am not a big fan of online banking because I’m fearful of compromising my personal information and becoming a victim of identity theft, or worse. If you are an Internet whiz kid, check out the services at  institutions like Ally Bank, Discover Bank and ING Direct, among others.
If you decide to switch banks, Consumers Union offers a checklist for consumers who want to switch at www.DefendYourDollars.org.
Don’t feel locked into your current financial institution. Free competition can be a very good thing for consumers.

Comments

  1. Hi Ellis–I completely agree with you about credit unions. In fact, I find it hard to understand why anyone uses the big banks. It’s simply amazing that they have the gall to institute fees for withdrawing your own cash. These institutions seem nothing short of bandits, holding their customers up at knife point on dark roads at night. They certainly held our whole country up during the mortgage crisis. My question is, do they really want regular depositors? Are they just trying to drive out smaller accounts in favor of the very wealthy?

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