Recently Bank of America announced a new plan to be rolled out early next year to start charging customers a $5 fee in any month when they use their debit card for a purchase. A spokeswoman for Bank of America, Anne Pace, said that customers will not be charged if using a debit card at an ATM, only for purchases. Some banks have already implemented this fee and others are saying they will follow suit. But why are customers being charged to use their own money?
Banks say that it’s because of the new rules that limit the revenue banks can get from certain merchants. But I think it’s just another way to stick it to consumers. Customers are just trying to access their own money, and now they are being charged to gain access to their own accounts. Loyal customers are now looking to switch to smaller banks and credit unions that are fee-free. And why shouldn’t they shop around for the best deal? Regional banks offer smaller to no fees for the same cards. And as a bank labeled ‘too big to fail,’ customers believe that Bank of America will be protected by a government bailout.
Most customers use a debit card to avoid the interests rates of a credit card. This new $5 charge is a giant mark-up and hugely exceeds the cost of processing a debit card transaction. In a nation in the midst of a financial crisis, charging customers a fee for something that used to be free could drive customers to take their banking and their business elsewhere.
I switched to a credit union when I first moved back to Lawrence. I prefer to have at least part of my money in a local bank/credit union. If something happens with that big bank miles away, the local business is a lot easier to work with. Some big banks do care about their customers though, and are very easy to work with. Unfortunately, they also have a tendency to be for specific clientele. USAA is a great example of such a bank.
ReplyDeleteI was genuinely saddened last week when I got the letter confirming rumors that the Mass Street branch of Central National Bank is closing. I opened an account there when I moved into my current (and only) apartment downtown. I picked it because I didn't drive and its terms were much better (for me) than Intrust Bank, which is actually a little closer, on Vermont. In the three years I've banked there, the tellers have come to recognize me and even send me a personally signed birthday card. (!) I'll stay with Central National when "my" branch closes in January, more than likely, because (unless, I suppose, I count what'll likely be out-of-my-way gas expenditure), it's in my financial best interest. But there's something to be said, too, for the loss of a neighborhood institution that it was. I'll no longer be able to walk a block from my employer to my bank and three blocks more to my home. Can I blame this to on the corporate banks? I wish I could, but, at the risk of sounding like a townie, I just feel sad at the loss, just like I am for Round Corner Drug Store and the Casbah and the dance studio and so on ...
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