Bank of America to charge $5/month for debit card swipes

[EL PRESIDENTE]

Fuck them.

http://latimesblogs.latimes.com/mon...s-5-monthly-fee-for-debit-card-purchases.html

Most Bank of America customers will soon see a new charge on their statements -- $5 for any month in which they use a BofA debit card to make a purchase.

Consumers should prepare for more such charges, analysts say, as big banks strive to recover revenue they have lost to financial reforms adopted in the aftermatch of the economic meltdown.

The new Bank of America fee will be phased in early next year, said Anne Pace, a spokeswoman for BofA, the nation's largest retail bank.

Customers will still be able to use their cards at the bank's automated teller machines without being charged, the bank said Thursday.

They also can make debit purchases free if they have a mortgage from Bank of America or if they have a total of $20,000 on deposit at Bank of America and in certain Merrill Lynch accounts (you may recall that Bank of America's corporate parent bought Merrill Lynch as the financial crisis set in).

The bank, like others, has been testing ways to recover debit-card revenue that is going away because of new regulations.

 

[PapaG]

Fuck them.

http://latimesblogs.latimes.com/mon...s-5-monthly-fee-for-debit-card-purchases.html

I've got some money parked at BofA so it won't affect me, but is this going to be the new industry norm? If people go back to writing checks I'll never shop again. The old ladies at the grocery store who take an hour to write a check and then enter it into their ledger still drive me nuts.

 

[EL PRESIDENTE]

Really lame. You knew if they got regulated with new rules, they would just pass the cost onto us consumers. Might switch over to using my other accounts instead. it sucks because the ATMs are so convienient and check deposits. hopefully they'll get enough backlash to stop this.

 

[EL PRESIDENTE]

but I imagine they won't exist in 5 years. Fuck them. I'll piss on their branches when they close.

 

[BLAZER PROPHET]

The bailout money they were supposed to distribute, but kept, wasn't enough?

 

[EL PRESIDENTE]

Glad to see those rules that congress passed last year to limit excessive debit card fees are working! :MARIS61:

 

[Nate4Prez]

As a banking analyst for one of the largest banks in the world, I have to say the fees are getting a little crazy. But every time I introduce a new fee I like to come up with a way to avoid the fee. These fees are necessary to allow people to bank. With the new merchant services regulations and people being able to "opt in and opt out" of overdraft fees banks have to get income from somewhere. On average, it costs $75.00 to the bank just to open a new account (paperwork, checks, debit card, paying the banker), and most people, who use their accounts appropriately, actually cost the bank money (if they have no other relationship, e.i. loans, credit cards).

These are all fees associated with our "Free Checking" account:
$10.95 monthly service charge (direct deposit of $300.00 or more waives the charge)
$5.00 a month statement fee (setting up online statements waives the charge)
$2.00 a month debit card fee (making ten transactions with the debit card waives the charge)

 

[Nate4Prez]

The bailout money they were supposed to distribute, but kept, wasn't enough?

The bailout was offered and a lot of banks took it who didn't need it. Bank of America was one of those banks. BofA was a profit.

 

[Denny Crane]

The bailout was offered and a lot of banks took it who didn't need it. Bank of America was one of those banks. BofA was a profit.

If I remember correctly, BofA didn't need or want bailout money. It was forced on them.

Anyhow, some of us taxpayers are bailing them out $5 at a time now.

 

[Nate4Prez]

If I remember correctly, BofA didn't need or want bailout money. It was forced on them.

Anyhow, some of us taxpayers are bailing them out $5 at a time now.

No, taxpayers aren't, BofA customers are, you have a choice to bank with them.

 

[chris_in_pdx]

I've got some money parked at BofA so it won't affect me, but is this going to be the new industry norm? If people go back to writing checks I'll never shop again. The old ladies at the grocery store who take an hour to write a check and then enter it into their ledger still drive me nuts.

There will be a check writing fee, I'm sure. 50 cents per check processed or some stupidity. So tell me again why banking regulation is bad?

 

[illmatic99]

WTF. I use my BofA debit card for like everything.

 

[Mamba]

Just closed my account out with them today.

 

[Denny Crane]

No, taxpayers aren't, BofA customers are, you have a choice to bank with them.

See the word "some" ?

BofA customers are tax payers.

 

[MickZagger]

Credit unions are where its at.

 

[J~Rush]

Chase started charging me for what was previously free checking. I closed my account soon after and moved to a credit union.

 

[EL PRESIDENTE]

I would change all my shit, but I'm lazy. not worth the 60 dolla a year. I'll just take it up teh butt. I'll just piss on an ATM one night as revenge.

 

[blazerboy30]

As a banking analyst for one of the largest banks in the world, I have to say the fees are getting a little crazy. But every time I introduce a new fee I like to come up with a way to avoid the fee. These fees are necessary to allow people to bank. With the new merchant services regulations and people being able to "opt in and opt out" of overdraft fees banks have to get income from somewhere. On average, it costs $75.00 to the bank just to open a new account (paperwork, checks, debit card, paying the banker), and most people, who use their accounts appropriately, actually cost the bank money (if they have no other relationship, e.i. loans, credit cards).

These are all fees associated with our "Free Checking" account:
$10.95 monthly service charge (direct deposit of $300.00 or more waives the charge)
$5.00 a month statement fee (setting up online statements waives the charge)
$2.00 a month debit card fee (making ten transactions with the debit card waives the charge)

Banks are making money off the ability to have our money for years and years. The "costs" of holding onto our money should be taken out of that, not in additional fees passed onto the customers.

 

[BLAZER PROPHET]

The bailout was offered and a lot of banks took it who didn't need it. Bank of America was one of those banks. BofA was a profit.

I read that the money was distributed to the large banking institutions and they were supposed to filter it down to the smaller ones, but that most just kept the money. I also understand that a bank is a business and has to raise money to stay in business, but it does seem like bad PR to do this now.

 

[Nate4Prez]

Banks are making money off the ability to have our money for years and years. The "costs" of holding onto our money should be taken out of that, not in additional fees passed onto the customers.

How does a bank make money off a checking account? Online services, check cards, customer service reps there 24/7, check printing, ACH services (direct deposit). The truth is just having an account for your pay check to be deposited into and run check card transactions does not generate any revenue for the bank. How come time deposits rates are shit right now? Because a bank can no longer make money off of just holding your money.

 

[Nate4Prez]

See the word "some" ?

BofA customers are tax payers.

Bringing up taxpayers in this thread is pointless. Just as Blazer Prophet bring up the bailout. Neither one of those things has anything to do with the new banking fees.

 

[barfo]

How does a bank make money off a checking account? Online services, check cards, customer service reps there 24/7, check printing, ACH services (direct deposit). The truth is just having an account for your pay check to be deposited into and run check card transactions does not generate any revenue for the bank. How come time deposits rates are shit right now? Because a bank can no longer make money off of just holding your money.

I imagine they lend it out to someone and collect interest.

If they really couldn't make any money off of checking accounts, there wouldn't be checking accounts.

Edit: I guess, as you pointed out in an earlier post, sort of, using the checking account as a way of selling you other, higher profit services is another way they make money on it.

barfo

 

[Nate4Prez]

I imagine they lend it out to someone and collect interest.

If they really couldn't make any money off of checking accounts, there wouldn't be checking accounts.

barfo

You're not talking about a checking account. People need checking accounts to run their households. Checking accounts exist because they are a necessity. A time deposit is more what you are referring to. Say I open one up for 24 months for $100,000.00, the bank then can lend that money out for 24 months and at the end of that term they pay me 1.5% in interest. But on a checking account, when my $1,800 is deposited every two weeks, and my house payment is $1,400 a month and the majority of the rest goes to paying other bills or Blazer tickets the bank loses money on maintaining that account.

 

[barfo]

You're not talking about a checking account. People need checking accounts to run their households. Checking accounts exist because they are a necessity.

I don't think the banks provide checking accounts because they are a 'necessity'. They are either forced to do so by law (I'm unaware of such a law, but there could be one), or they do it because it somehow helps their bottom line. They don't provide them because you need them. Banks don't give a shit what you need, unless it makes them money.

A time deposit is more what you are referring to. Say I open one up for 24 months for $100,000.00, the bank then can lend that money out for 24 months and at the end of that term they pay me 1.5% in interest. But on a checking account, when my $1,800 is deposited every two weeks, and my house payment is $1,400 a month and the majority of the rest goes to paying other bills or Blazer tickets the bank loses money on maintaining that account.

I'm not a banker by any stretch of the imagination, so maybe I've got this wrong, but I don't believe banks are required to keep on hand all of the deposited money. While you and many others might withdraw your money almost immediately after depositing it, if there are thousands of you, the bank can take a fraction of the money deposited and loan it out, while still keeping a buffer inhouse large enough to cover any non-bank-crisis withdrawals that might happen. Because you won't all withdraw your money on the same day, unless everybody panics.

barfo

 

[Nate4Prez]

I don't think the banks provide checking accounts because they are a 'necessity'. They are either forced to do so by law (I'm unaware of such a law, but there could be one), or they do it because it somehow helps their bottom line. They don't provide them because you need them. Banks don't give a shit what you need, unless it makes them money.

barfo

They offer checking accounts in the hopes they will be able to build a relationship with you as a customer. Offer you a credit card, auto loan, or a mortgage. It used to be the fees they could charge for merchant processing and a overdrafts covered the costs of maintaining a checking account relationship with the bank, but just a checking account relationship is not profitable for the bank.

I was on a conference call last week with the head of our U.S. division and he said the bank was introducing more fees in the coming months because (1) the initial fee structure that was introduced didn't cover the costs and (2) they "retained much more customers than expected." I heard that second part as "we didn't lose as many as we had hoped."

 

[barfo]

They offer checking accounts in the hopes they will be able to build a relationship with you as a customer. Offer you a credit card, auto loan, or a mortgage. It used to be the fees they could charge for merchant processing and a overdrafts covered the costs of maintaining a checking account relationship with the bank, but just a checking account relationship is not profitable for the bank.

I was on a conference call last week with the head of our U.S. division and he said the bank was introducing more fees in the coming months because (1) the initial fee structure that was introduced didn't cover the costs and (2) they "retained much more customers than expected." I heard that second part as "we didn't lose as many as we had hoped."

Yeah, I could believe it is a loss-leader for their other products. That makes sense. Still, that means they are doing it for profit motive.

barfo

 

[ABM]

They offer checking accounts in the hopes they will be able to build a relationship with you as a customer.

And, conversely, will lose me as a customer if they decide to charge me to swipe their debit card.

 

[Nate4Prez]

And, conversely, will lose me as a customer if they decide to charge me to swipe their debit card.

And you should leave. I don't have any accounts with the bank I work for. I still have all my accounts with U.S. Bank because they don't charge me any fees. But don't kid yourself into thinking that them "losing you as a customer" affects them. They want to lose the customers they can not make a profit on.

 

[ABM]

And you should leave. I don't have any accounts with the bank I work for. I still have all my accounts with U.S. Bank because they don't charge me any fees. But don't kid yourself into thinking that them "losing you as a customer" affects them. They want to lose the customers they can not make a profit on.

I pay no bank fees and make money on my credit card.

The way it should be.

 

[jlprk]

It used to be, if banks needed to increase their profit from depositors, they increased the interest rate they charged borrowers. Simple.

This concept went out the window when banker's hours ended. When tellers had to greet customers outside of 10 am to 3 pm, they just cracked and freaked out. They forgot how to keep it simple. Just increase interest rates to borrowers. Then they started being open till 6 or 7 pm. The nation's financial system collapsed.

It's quite obvious how to save this country, but no one listens.