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Fee for using debit card

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Fee for using debit card

Old 09-29-11, 11:01 PM
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Fee for using debit card

Yet another reason NOT to use debit cards.

What will debit card users do now? Pay the fee, go back to credit cards, or find a new bank?

Banks to Make Customers Pay Fee for Using Debit Cards
By TARA SIEGEL BERNARDand BEN PROTESS
Published: September 29, 2011

Bank of America, the nation’s biggest bank, said on Thursday that it planned to start charging customers a $5 monthly fee when they used their debit cards for purchases. It was just one of several new charges expected to hit consumers as new regulations crimp banks’ profits.

Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month, while SunTrust, another regional powerhouse, is charging a $5 fee.

The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. The rule, known as the Durbin amendment, after its sponsor Senator Richard J. Durbin, is a crucial part of the Dodd-Frank financial overhaul law.

Until now, the fees have been 44 cents a transaction, on average. The Federal Reserve in June agreed to cut the fees to a maximum of about 24 cents. While the fee amounts to pennies per swipe, it rapidly adds up across millions of transactions. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.

And even though retailer groups had argued that lower fees were important to keep prices in check, consumers were not likely to see substantial savings. In fact, they are simply going to end up paying from a different pot of money.

Or as Jamie Dimon, chief executive of JPMorgan Chase, put it after passage last year of the Dodd-Frank Act, “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger.”

Chase is now charging customers for a paper statement. It also, like many other banks, scrapped its debit card rewards program. And customers that Chase inherited from Washington Mutual no longer enjoy free checking accounts.

The bank is also exploring a number of other fee increases, including for online banking, according to people with knowledge of the matter.

Bank of America’s debit fee is steeper than most of its competitors’, reflecting the broader challenges the bank is facing after the financial crisis. The bank has introduced an online-only account that charges customers for doing business at a local branch. It also plans to apply its new debit card fees to anyone who uses the card to make recurring payments like gym fees or cable bills.

Citibank is one of the few that said it would not introduce a charge for debit card use. “We have talked to customers and they have made it abundantly clear that ‘if you charge me to use my debit card, I would find that very irritating,’ ” said Stephen Troutner, head of Citi’s banking products. Still, the bank has made it more difficult to qualify for free checking, among other moves.

Earlier this year, Wells Fargo estimated that the Durbin rules would cost the bank $250 million in revenue every quarter. It hopes to make up half that gap with a variety of new products and customer fees, including the monthly debit card fee of $3. The change is part of a “pilot program” the bank will begin on Oct. 14 in five states across the country, including Washington and Georgia. As of Saturday, the bank will discontinue its debit card rewards program.

Meanwhile, HSBC said that it recently increased an A.T.M. fee — to $2.50 from $2 — for certain customers when they used a competitor’s A.T.M. It also recently introduced a debit transaction fee of 35 cents, though the first eight transactions are free.

And at TDBank, customers will now have to pay $2 for using A.T.M.’s outside their network.

“Durbin essentially moves the cost of debit away from merchants, and now it’s more focused on consumers,” said Beth Robertson, director of payments research at Javelin. “There are all sort of things happening where banks are saying, where can we put fees in place for our service to generate revenue or how can we reduce our costs?”

Over the last few years, consumers have increasingly shifted their spending to debit cards from credit cards, in large part to curb their spending. But some analysts predicted that the new fees could prompt consumers to return to credit cards — a more lucrative alternative for the banks.

Consumers have already begun to react to the changes.

Patrick Shields, 48, said he had decided to leave Citibank, where he has held a small-business account for his residential window cleaning business since 1986. He was contemplating opening a personal checking account, but realized he could do better at a credit union.

“At the credit union, they opened it free of charges, which Citi could not and would not do,” said Mr. Shields, who noted that a personal checking account would have cost more than the one he uses for his New York business. “Now I have both accounts covered, and I am fee-free.”

The so-called Durbin rule quickly emerged as one of the thorniest provisions of Dodd-Frank, touching off a long and furious fight in Washington. Wall Street dispatched an army of lobbyists to tame the rule, ultimately yielding mixed results.

In June, the Senate defeated a measure that would have delayed the new rule. But just three weeks later, the Federal Reserve decided to cap the fees at 21 to 24 cents for each debit card transaction, a much lighter blow than once expected.

In a statement on Thursday, Senator Durbin, Democrat of Illinois, said that small businesses would benefit from the new limits. “Swipe fee regulation will still allow banks to cover the actual costs of debit transactions but will rein in the banks’ excessive profit-taking.”
http://www.nytimes.com/2011/09/30/bu...-card-fee.html
Old 09-29-11, 11:19 PM
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Re: Fee for using debit card

My credit union allows two debit card transactions per month without a fee. This was implemented a few years ago. I rarely use the debit function of my ATM card so it has not affected me too much.
Old 09-29-11, 11:21 PM
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Re: Fee for using debit card

When I go to Publix the machine automatically brings up the debit option even if I press credit. They are not the only ones either. Avoiding debit purchases is not really an option.
Old 09-29-11, 11:23 PM
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Re: Fee for using debit card

In a statement on Thursday, Senator Durbin, Democrat of Illinois, said that small businesses would benefit from the new limits. “Swipe fee regulation will still allow banks to cover the actual costs of debit transactions but will rein in the banks’ excessive profit-taking.”

Yeah, that worked out real well. Color me shocked.
Old 09-29-11, 11:24 PM
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Re: Fee for using debit card

Originally Posted by Ranger View Post
Yet another reason NOT to use debit cards.
Actually it's another reason not to bank with BoA. They lost a car payment of mine and, once they figured out they applied it to the wrong account, STILL wanted me to pay the late fee. Paid the car off and never wanted to do anything with them again.
Old 09-29-11, 11:33 PM
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Re: Fee for using debit card

I think it's best to stay away from the Big 3.
Old 09-30-11, 01:20 AM
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Re: Fee for using debit card

That's odd- my Chase account will charge me a fee if I don't use my debit card at least 5x in a month. I'll also need to make a note not to use BOA at Costco, which only takes debit (except Amex, which I had once, but they cancelled my card one day without warning, causing a number of my auto-billpays to go overdue, racking up a bunch of other extra charges there, so fuck them)
Old 09-30-11, 01:55 AM
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Re: Fee for using debit card

Credit union here we come
Old 09-30-11, 02:06 AM
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Re: Fee for using debit card

Originally Posted by logrus9 View Post
In a statement on Thursday, Senator Durbin, Democrat of Illinois, said that small businesses would benefit from the new limits. “Swipe fee regulation will still allow banks to cover the actual costs of debit transactions but will rein in the banks’ excessive profit-taking.”

Yeah, that worked out real well. Color me shocked.
No shit. Hey, maybe all those merchants will lower their prices...

Fortunately, I don't use a debit card and never have. I don't see a point when a credit card does the same thing and does pay back.

I have never paid for a checking account in my life. I would think this would make people go to other banks, but people tend to just take small fees in stride. No idea why.
Old 09-30-11, 02:13 AM
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Re: Fee for using debit card

I bank at the evil bofa, I plan not to use the debit function of the card, may turn it in and just get an atm card, do not get in line behind me, I will be using checks agian, making more work for the evil bofa.
Old 09-30-11, 03:05 AM
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Re: Fee for using debit card

Chase is starting this too. I'm finding a new bank.
Old 09-30-11, 06:08 AM
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Re: Fee for using debit card

Originally Posted by movie diva View Post
I bank at the evil bofa, I plan not to use the debit function of the card, may turn it in and just get an atm card, do not get in line behind me, I will be using checks agian, making more work for the evil bofa.
I'm with you on checks. Back to the stone age we go!
Old 09-30-11, 06:12 AM
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Re: Fee for using debit card

Originally Posted by filmerp View Post
That's odd- my Chase account will charge me a fee if I don't use my debit card at least 5x in a month.
My Citizens account does the same.
Old 09-30-11, 06:52 AM
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Re: Fee for using debit card

While my bank doesn't charge a fee for debit card non-use, they reward me with higher interest (3.01% on the first $15K) for using it at least 10x a month.
Old 09-30-11, 07:05 AM
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Re: Fee for using debit card

Switching to Alliant CU from Chase was the best decision I've made all year.
Old 09-30-11, 07:11 AM
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Re: Fee for using debit card

Chase is now charging customers for a paper statement.

The bank is also exploring a number of other fee increases, including for online banking, according to people with knowledge of the matter.
Dandy. If you want to see your statement on paper or online, they will charge a fee.
Old 09-30-11, 09:03 AM
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Re: Fee for using debit card

Hell, if you're getting the typical 0.2% or whatever on your checking, in a lot of cases you'd probably literally be better off keeping your money under your mattress.
Old 09-30-11, 09:25 AM
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Re: Fee for using debit card

We just changed banks due to high fees. Wells Fargo can kiss my ass. I don't know how WF and BoA can survive when I can just go down the street to 4 other banks that don't charge the fees. I guess people don't care or are too lazy to tell them to fuck themselves.

If all banks start doing this, I will just use a credit card for everything and collect the cash back.
Old 09-30-11, 09:26 AM
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Re: Fee for using debit card

Originally Posted by PopcornTreeCt View Post
When I go to Publix the machine automatically brings up the debit option even if I press credit. They are not the only ones either. Avoiding debit purchases is not really an option.
You hit cancel and force it to take it as credit. It's a ploy so they get around paying the credit card fee. I get rewards when I use my ATM as a credit card so that is the only way I use it.
Old 09-30-11, 09:33 AM
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Re: Fee for using debit card

Originally Posted by CRM114 View Post
We just changed banks due to high fees. Wells Fargo can kiss my ass. I don't know how WF and BoA can survive when I can just go down the street to 4 other banks that don't charge the fees. I guess people don't care or are too lazy to tell them to fuck themselves.

If all banks start doing this, I will just use a credit card for everything and collect the cash back.
I think it's laziness mostly. It's frickin' sad. And I think a lot of people also believe if they're with a bigger bank, their money is safer. So laziness and stupidity.

Yay America!
Old 09-30-11, 09:36 AM
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Re: Fee for using debit card

And people are wondering what the "Occupy Wall St" thing is all about. Wake up people. You are getting fucked from every direction.

Originally Posted by superdeluxe View Post
Credit union here we come
When I was bank shopping a few months ago, credit unions had just as high fees as Wells Fargo. And they are a million times less convenient. For the record, I chose PNC Bank.
Old 09-30-11, 09:39 AM
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Re: Fee for using debit card

Another reason why I don't use a bank. My local credit union not only has hundreds of no-fee area ATMs, but it gives me a $10 monthly credit for other machines' fees if none are available.
Old 09-30-11, 09:43 AM
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Re: Fee for using debit card

This is why I live on the barter system.
Old 09-30-11, 09:47 AM
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Re: Fee for using debit card

Originally Posted by Randy Miller III View Post
Another reason why I don't use a bank. My local credit union not only has hundreds of no-fee area ATMs, but it gives me a $10 monthly credit for other machines' fees if none are available.
My pet peeve is overdraft protection fees. I never paid a fee with Wachovia. When Wells Fargo bought them, the fees started rolling in. The credit unions I went to also had overdraft fees.

Sorry, if I have X amount in my savings, I don't expect to pay a fee to move money from one account to another.
Old 09-30-11, 09:48 AM
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Re: Fee for using debit card

At least with Bank of America's fee, supposedly it doesn't matter whether you select debit or credit, they're going to charge you the fee either way.

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