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Bank of America to charge monthly fee to debit card users

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Re: Bank of America to charge monthly fee to debit card users

#31

Post by refurb »

seanalltogether wrote: post #14

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures." I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as p…

How do you maintain something as "free" when it costs money? Do you mean having no fees for the digital currency transactions and having the tax payer pick up the cost?

Re: Bank of America to charge monthly fee to debit card users

#32

Post by subsection1h »

natesm wrote: post #17

Well, I'm switching (I don't have a credit card). What is a good alternative? I know everyone loves USAA, but none of my family has any relation to the military. BoA is "great" because it is everywhere , is there actually anything as wide spread in the (northeast) US?

  What is a good alternative?
Here is a list on FatWallet showing the "Best Nationally Available High APY Liquid Accounts":

http://www.fatwallet.com/forums/finance/783099/

Alliant Credit Union is usually near the top of the list. My Alliant checking account has been my primary checking account for years. Not only is my Alliant checking account free, but I currently earn 1.10% APY with it:

http://www.alliantcreditunion.org/depositsinvestments/checki...

Deposits can be made at tens of thousands of ATMs across the country:

http://www.alliantcreditunion.org/about/atms/

I also have my HSA at Alliant because they're usually near the top of the list of best HSA providers:

http://www.fatwallet.com/forums/finance/542257/

Re: Bank of America to charge monthly fee to debit card users

#33

Post by RomP »

refurb wrote: post #31
seanalltogether wrote: post #14

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures." I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as p…

How do you maintain something as "free" when it costs money? Do you mean having no fees for the digital currency transactions and having the tax payer pick up the cost?

Tax payers have been paying for manufacturing of tangible currency for many centuries. Creating and supporting financial environments is one of the features of governments.

Re: Bank of America to charge monthly fee to debit card users

#34

Post by chrischen »

seanalltogether wrote: post #14

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures." I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as p…

It depends on whether or not there's still room for innovation in digital currency transactions. If there is room for innovation then the private sector should focus on it before everyone combines their effort on a consensus.

Re: Bank of America to charge monthly fee to debit card users

#35

Post by dangrossman »

learc83 wrote: post #3

Just read in the article that the fed lowered maximum interchange fees. Has this translated to lower fees from payment processors for anyone?

It will for me since my account is priced in terms of "interchange + x%". Whenever interchange changes so do my fees. From what I've read so far, this will actually lead to an increase in my fees beginning in October, not a decrease. Visa will raise the interchange to the new maximum federally allowed value for some card types where they were previously charging less than this.

Re: Bank of America to charge monthly fee to debit card users

#36

Post by patio11 »

seanalltogether wrote: post #14

"The formula sets the cap at 21 cents, plus .05 percent of the transaction amount, plus another penny in certain cases, for fraud-control measures." I understand that running to the government for solutions is rarely a good thing, but in this case, shouldn't "digital currency transactions" be something that the federal government maintains as a free utility to society? Isn't something like this just as important as p…

So you know cash has processing fees associated with it, right? Really. They're totally orthogonal to the cost of physically creating paper or metal currency, and they're mostly subsidized by merchants. Cash management is a hard problem. WalMart spends about 3 million every year moving pennies around -- that actual coin type. Every time a salon owner has to spend time driving to the bank or money leaves a cash register, that's just another cost incurred because the merchant accepted cash money as a payment type.

Checks also have processing fees associated with them. They're mostly subsidized by banks.

Credit cards have processing fees, paid for mostly by merchants.

Merchants really want banks to subsidize their use of debit cards, like banks subsidize their use of checks.

There is no such thing as free, there's just free-from-the-perspective-of-your-own-P&L-statement.

Re: Bank of America to charge monthly fee to debit card users

#37

Post by tzs »

untog wrote: post #4

I think the thing that really annoys me about these kind of moves is that they're clearly targeting the less fortunate out there. If I want to avoid the $5 that's easy- I'll just switch to my credit card. But people who don't have enough credit to get a credit card now get punished twice. I read a fascinating passage in The Big Short (an excellent book on the financial crisis by Michael Lewis) that told the story of…

Switching to the credit might not help. Some merchants charge more for credit card purchases (to cover the transaction fees). Well, technically they gave a cash discount to people not using credit cards because credit card association rules prohibited charging more than the advertised price to credit card users, but the net effect was the same.

And now, due to the Wall Street Reform and Consumer Protection Act 2010, credit card associations are no longer allowed to have that control, so merchants can instead advertise the cash price and add a surcharge for credit cards (ARCO just recently started taking credit cards, and that is what they are doing).

Furthermore, merchants can now charge extra to people using rewards cards. A lot of people don't realize this, but when you use a card that give cash back, or mileage, or points or whatever, the bank and credit card company do not pay for those rewards. They charge an extra 0.97% of the transaction amount to the merchant to cover the rewards.

Re: Bank of America to charge monthly fee to debit card users

#40

Post by bilbo0s »

untog wrote: post #4

I think the thing that really annoys me about these kind of moves is that they're clearly targeting the less fortunate out there. If I want to avoid the $5 that's easy- I'll just switch to my credit card. But people who don't have enough credit to get a credit card now get punished twice. I read a fascinating passage in The Big Short (an excellent book on the financial crisis by Michael Lewis) that told the story of…

There is actually something more fundamentally troubling about this new fee ...

it drives Americans to use more credit.

It was pointed out to me recently that this tendency towards credit that is really 'built-in' to the rules in our society, would probably end up doing us in one day. Sometimes you don't even think about it. I recall once, shortly after the onset of the financial unpleasantness that began in 2008, I was at an airport trying to rent a car. I thought, "Hey...I'd better start practicing what I preach!" So I whipped out a simple debit card, with more money behind it than the value of the car I was renting. "Nope...we don't accept debit...only credit". I thought, "That's a little strange...no wonder the financial system is taking a crap." I didn't have a lot of time, so I just did the credit card thing.

Point is, there are a large number of places out there that will not allow you to do business with them unless you are willing to go into debt, for however brief a period of time. When you consider the size of the US and the number of transactions being made every day...that's a little concerning.

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