Monday, October 3, 2011

Debit Card Fees Coming Your Way

Since banks like Wells Fargo, Bank of America and Citibank are now strapped for cash because of all of the toxic loans they have made (and now hold) along with other increased costs of government regulation ... they are going to be raising their rates and one of the things they are doing is to slap you with a $5 a month fee for using your debit card!

That's an extra $60 a year just for the privilege of using your debit card which accesses the money in your savings or checking account when you use your card at a store or restaurant or purchase items online.

Now some people won't care - but it looks like a lot of people do care.
$60 could buy some groceries - or gas.

There's a movement afoot of people who are dumping their accounts in these banks and moving to credit unions or even just stopping the practice of using debit cards (and canceling them) and instead just going to ATM's and withdrawing money that they know they will need for their transactions.

With lots of people canceling their bank accounts with these big banks and pulling their money out - this move to put such a fee on debit transactions just might backfire - similar to what happened when Netflix instituted a $6 per month price increase a few months ago. Netflix is now experiencing some financial difficulty as a result.

The banks have put exemption requirements on these fees, as a way to entice you to keep money in their banks or hold a mortgage with them.

Zerohedge writes:
As for the exemption requirements, they will likely be the same as Bank of Countrywide Lynch's: either have a mortgage with the TBTF behemoth, or have $20k in a deposit account - both which will likely not be much of a help to 90%+ of the bank clients. The biggest problem is that suddenly at risk are $1.9 trillion in deposits - $1 trillion at BofA, $866 billion at Citi. While the financial crisis did little to dent the banks' deposit buffer, it will be highly ironic if it is an act of the banks themselves that begins the great bank run that resets it all.

And don't think for a moment that these fees won't be going up at some later point in time.

Some people are suggesting that now might be a good time to close the account you have in a mega bank like CITI, Bank of America, and Wells Fargo and move them to a local credit union.

Shop local.
Buy local.
Bank local.