<p>Been banking with credit unions since I was a kid. No way will I ever bank with a giant multinational corporation.</p>
<p>And yes, it’s totally a myth that somehow credit unions are “inconvenient.” The vast majority of credit unions subscribe to a shared branching and ATM network, meaning that you can do transactions with your home credit union at the branch of any other credit union, and use your debit card fee-free at any credit union ATM.</p>
<p>I have never been impressed with credit cards. Everytime we have moved/started a new job and I have looked into them, they always had multiple fees for the services we would have wanted to use. Interest rates were almost always higher than banks when I inquired. </p>
<p>That said, I don’t bank with BoA although I have one cc and they have our home loan (sold to them from local bank then through another company). We use a regional bank. I have an debit card but only use it for ATM.</p>
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<p>I have had this happen to me with my debit card. It’s one reason I look at my online banking on a daily basis; normally 2-3 times a day. I know exactly what is in my bank account and I know when payments are supposed to come out…</p>
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<p>I have not made a study of the Canadian banking system, but I would bet they are much more closely regulated than American banks are these days. Could it be that the reason they aren’t having a mortgage crisis is that they weren’t permitted to write crazy mortgages in the first place?</p>
<p>As to large banks being a bad thing, what got us into trouble was the “too big to fail” issue. Under capitalism, a privately-owned company is supposed to fail if it gets itself into the kind of trouble that the big banks did. Of course, these banks had to be rescued in '08 to prevent the collapse of the entire financial system. But it appears we haven’t learned the lesson; those same banks are bigger now than they were when the taxpayers them bailed out. </p>
<p>I understand why they resist regulation. They have a pretty sweet deal: capitalism when things are good, socialism when things go bad (and CEO compensation that bears no relation to performance – try asking YOUR boss for a guaranteed bonus regardless of how well you do your job!). But they need to be broken up. A bank that is too big to fail is too big.</p>
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<p>Nice for you…but my 20 somethings do not have $20,000 minimum balance in their BOA accounts…nor do they have mortgages with the bank. They were told these were the criteria for NOT being charged the fee.</p>
<p>The people this will hit the most are the young college grads…especially ones who are underemployed or unemployed. Almost NO ONE who is in their 20s uses checks to pay at the register…they use their debit cards (heck…I do too). Many of these kids won’t have the minimum balance…and many of them don’t have mortgages at all…never mind with BOA.</p>
<p>You would think the banking industry would be trying to figure out ways to KEEP their younger account holders. Guess not.</p>
<p>Yes…there is three months to figure this all out. My kids have both indicated they will vote with their feet…they will be banking elsewhere.</p>
<p>Oh, glad to know that there are 3 months before this takes effect. S has been wanting to close his BofA account. This will give him an impetus to do it next time he is able. He has NEVER liked the bank & opened it for the convenience of his aunt (long story).</p>
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<p>Some people do not have enough money or an employment situation that qualifies them for a credit card. If you have a bank account, you can have a debit card, and since they are all MC or VISA these days, one can use it like a credit card: to purchase things over the internet, for example.</p>
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I don’t have anything like that either, and it certainly is not what I’ve been told. But I now that B/A has different offerings in different states, so maybe there will be regional differences. I’ll wait until the dust settles to ascertain what the real policy is. As to my kids, I don’t tell them where to bank, they live in different states and have different sets of options. Given my d’s history with her worldwide travels – I doubt that she cares – the real ouch-worthy issue over the years have been foreign transaction fees coupled with out-of-network ATM fees. I never could convince my d. that it made sense for her to take out larger amount of cash with each ATM visit rather than paying the fee each time, so I doubt that paying the cost of a venti latte once a month for her debit use is going to be much of a deterrent.</p>
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That hasn’t always been a good thing. The bank gave my kids debit cards on their student savings accounts when the were kids-- I think my daughter was 8 - and that ready access to cash wasn’t always such a good thing. My d’s elementary school was across the street from a strip mall with an ATM & lots of spots for kids to spend money. But when my d. was 14 and I tried to get the bank to give her a checking account, they refused based on her age – I ended up setting up a 2nd, joint account with her to get her the checks. She still uses the account for writing checks – I looked and I don’t see a debit transaction in month - I know that she has a 2nd account, but I am guessing that she probably only needs checking for one.</p>
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It’s math.</p>
<p>The math goes like this. On average, the banks got 44 cents per debit card transaction. Then a law got passed that said that they could only get 12 cents per debit card transaction. That is 36 cents time millions of transactions. They decided to recoup that cost from the consumer.</p>
<p>Now for YEARS the real windfall to the banks has been the fees they would charge to those young, cash-strapped people, for debit-card generated overdraft fees. They used to pay out the largest debit transaction of the day first, and then if the account was then overdrawn, charge a $12 or $20 fee for each and every debit charge after that. If the person had deposited money to cover the debit charges, that would be credited AFTER the debits were run through and the overdraft fees charged. </p>
<p>No big long CC threads bashing the banks about those practices, however.</p>
<p>That practice was also stopped with legislation – the banks can still charge an overdraft fee on debits, but only one per day. </p>
<p>I do see some irony given the number of posters singing the praises of small banks and credit unions, yet apparently angry with B/A for implementing a policy that will tend to encourage younger customers to actually use those alternatives. If they are so wonderful and convenient, why not celebrate B/A’s move, which creates a wonderful opportunity for its competitors?</p>
<p>As unaccustomed as I am to defending corporate America… what’s the big deal? </p>
<p>If having a BoA account is worth the cost of an overpriced cup of coffee-with-warm-milk per month to you, keep your account. </p>
<p>If it’s not, take your business elsewhere.</p>
<p>Calmom, small community banks and credit unions are having great difficulty making money today, and the community banking model as we now know it is in serious danger of not surviving. Many small banks are closing or have been taken over by the FDIC in the last few years. When you have a few banks controlling over half the deposits in the US, it creates many problems for the smaller community banks. When the govt promulgates massive and expensive regulations primarily to govern the behavior of these mega banks, they fail to realize the community banks, which also have to comply, do not have the infrastructure or the capital to pay for these extraordinary costs. The mega banks also can’t make any money from traditional banking activities, but because of their investment banking and brokerage subsidiaries they can withstand the onslaught of these regulations limiting their banking profits. Lastly, with the Fed Reserve attempting to flatten the yield curve (Operation Twist), the interest rate spread the banks need to make money in their lending activities are severely diminished. If you don’t believe what I am saying, check the stock prices of some of these banks.</p>
<p>One last point - if you’re a small business, try getting a loan from BoA, Wells, Citicorp, and Chase. It is practically impossible. Without the small community banks, small businesses will increasingly have a difficult time getting their credit needs met.</p>
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<p>I don’t understand how this is ironic. If you don’t like Business A’s policies and you do like Business B’s policies, it’s perfectly logical and reasonable to criticize A and encourage peopel to go to B. That’s how the market system is supposed to work, right? </p>
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<p>Doesn’t the most recent regulatory bill create exemptions for banks with assets less than a certain amount?</p>
<p>This is a similar problem that non-profits have. Because of a few bad eggs, HUGE, massive, unwieldy regulations have been passed that apply to nearly all non-profits which make it increasingly difficult for the “small” guys who operate on shoestring budgets to do a lot of good in local communities to operate at all.</p>
<p>It is a growing problem–using sledgehammers to try to get the few bad actors to behave while hammering all those who are trying their best to be compliant. I agree that small non-profits, local business and banks have a lot of trouble drowning in regs & paperwork.</p>
<p>Bank of America has thousands of ATM machines. They are not free to manufacture.</p>
<p>No one is forcing you to use their ATM machines.</p>
<p>If they want to charge you $5 a month, that is their business. You can either pay it, or go to a different bank. Some banks will match the fee. Some won’t, hoping that you will move their business to them.</p>
<p>While I don’t like the fee, it seems to me that it is a very reasonable fee, given the extraordinary 24 hours access to your money that this gives you.</p>
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Agreed, but my point is that when B of A announces publicly that it intends to start charging $5 month for debit card use, that is a pro-competitive (rather than ant-competitive) move. They have the muscle to continue to offer free debit cards but ding the consumer in other, less transparent ways – or they could quietly have achieved the same result by increasing the monthly fees for basic accounts. </p>
<p>So everyone is ticked off, but the thing they are ticked off about is not the true problem. It would be analogous to Amazon announcing one day that they will no longer offer free shipping to any customers. That would cause a lot of customers to think twice about buying from Amazon, but it would help rather than hurt local retailers who can’t compete with Amazon on the discount pricing. </p>
<p>I’m not interested in defending B of A. I do have to say, however, that they have provided me with a huge amount of services over the years for free. I have been doing my bill paying online for pretty much as long as it has been available, and I long ago lost track of the number of times when some creditor claimed they hadn’t received a payment, I sent an email to B of A… and they fixed it. Without online banking, I had plenty of similar disputes, but I had to be the one spending time on the phone and digging up paperwork to resolve that problem. </p>
<p>My personal track record with B of A is that of all the banks I have dealt with, I’ve found them the easiest to deal with and most responsive to my needs. That doesn’t mean that they are a better bank – that just means that I’ve had the bad luck to have negative experiences with Wells Fargo and various other banks & S&L’s that no longer exist. </p>
<p>The thing that hurts me financially are things like utility bills, cable bill, etc. Or what I pay at the pump for gas. I don’t have any say whatsoever with these services. </p>
<p>I don’t really know whether or not B/A should charge a fee for debit card use – but where did we ever get the idea that they were required to provide that service for free? After all, most checking accounts come with a monthly service charge, and the bank charges money to print the checks. </p>
<p>Isn’t a really a case that for years the mega-banks have been using their wealth to offer services for ‘free’ in a way that made it hard for the little guys to compete? And if anything, the debit-card fee is a retreat from that competition-crushing practice?</p>
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<p>OH…I AM celebrating. And so are my kids. It now will make the decision to close their B of A accounts a very easy one to make. They have been socked with fee after fee…there is a fee now if you don’t have a minimum in your accounts…or have direct deposit.</p>
<p>Calmom…the numbers I quoted have been well publicized regarding how these debit cards will be freebies. If you know of another way that these will be offered at no charge, please let folks here know…so they can check to see if they can get this banking option at no cost as well.</p>
<p>Thumper, what state are you in?</p>
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<p>Credit unions offer debit cards for free. If you meet some very modest requirements (at the one we’re moving to, $1000 balance or automatic payroll deposit), they don’t even have a monthly service charge. But then, they also don’t have wild executive bonuses to pay.</p>
<p>I’m in CT.</p>