Although it has not been officially reported by the company, a Wall Street Journal report says that Bank of America had decided to drop its plans to impose a $5-per-month fee on customers for using their debit cards.
A $5-per-month fee may not sound like a large amount and many customers may just shrug it off, but when you consider that Bank of America is one of the nation’s largest banks and reportedly has almost 60 million customers, collecting $5 from every month from every customer with a debit card probably represents a huge cash windfall for the bank each and every month.
As I’ve pointed out here before, debit cards and ATM machines save banks a lot of money. In the old days a worker would get paid, head down to their bank, cash their check and then use cash to pay for the majority of their purchases. When I was a kid I can remember my parents paying cash for just about everything. From gasoline to groceries to clothing, it was all paid for in cash.
Today, we just whip out our credit or debit cards to pay for just about everything. I’m as guilty as anyone else. I use my debit card in just about every place that can accept it as a form of payment.
All of the income we earn in my household is all delivered directly to our bank accounts electronically. If you think about it, automation has to have reduced the number of branches that banks need to be operate as well as the numbers of employees the bank needs to keep on the payroll. Just think how busy your bank would be if it was like the “old days” with people lining up to cash their paychecks every week.
That’s what was so outrageous about a ridiculous decision by some executive or executives at Bank of America to impose a $5-per-month fee for customers who use a debit card. Banks are generally bad enough to begin with due to all the extra fees they impose on customers.
Apparently the backlash from customers as well as moves by other banks who have decided to nix plans to impose new fees for services such as using debit cards has caused Bank of America to back down and drop their plan to gouge customers with the ridiculous debit card fee.
There are, however, other banks that are imposing new fees and restrictions on their customers. My wife and son, who both have accounts at TD Bank recently received letters informing them that their checking accounts must maintain a daily balance of at least $100 or they will face a $15-per-month penalty fee.
Since my wife uses her TD Bank account as a kind of secondary account where she deposits small amounts of money she makes online in her spare time, keeping a daily balance of $100 could become be a problem for her. I’ve encouraged her to close the TD Bank account and open an account at a local credit union. She doesn’t always listen to me, but I remain hopeful.
I stopped using banks many years ago since I finally got sick of being charged a fee for every check I wrote and other “service fees” that they seemed to impose just because I happened to have an account.
Since I started doing all of my banking with a credit union, I pay no fees whatsoever. The only time I would face a fee would be if a did something like overdraw my account or bounce a check.
The arrogance of big banks like Bank of America is quite disturbing. I’m guessing that their arrogance may have been dialed down a notch or two in light of this news that they have decided against the new debit card fee. Angry customers must have made a real impact on the decision-makers at Bank of America; not something we see every day, but quite refreshing when it does happen.
This move by Bank of America will probably allow them to hold on to a lot of customers who were planning to close their accounts due to the new fee. I would suggest that customers in that position take a close look at their account statements and see what other fees they are already imposing on them. There still may be many good reasons to close your Bank of America account.
Beyond the issue of fees, Bank of America customers may want to consider other factors such the bank’s plan to dump a bunch of lousy mortgages on American taxpayers. Surely, the politicians and bureaucrats that are collaborating with the big banks on deals like this are equally to blame but I suppose that’s a topic for another post.
Congratulations to all the Bank of America customers who complained loudly enough to make the banking giant back down. My hope is that many of those same customers will decide to close their accounts despite the bank’s decision. Giant banks that are “too big to fail” don’t benefit consumers. Competition is a good thing, so take a few minutes to check out your local credit unions or maybe even your local small bank that will likely free you from ridiculous fees as well as provide better service.
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