Bank of America to charge monthly fee to debit card users • Hacker News Board

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

#111

Post by re_todd » Fri, Sep 30, 2011, 5:51 AM UTC

navyrain wrote: post #5

I fail to see why anyone selects a big bank like BofA/WellsFargo/Chase for their personal accounts, when they are known to have a plethora of fees and dubious ethics, and there are almost always better options in regional credit unions. What am I missing?

     Some of us choose smaller banks, like Washington Mutual, but then they get bought out by bigger banks, like Chase.  Chase has not been as bad as Bank of America for me, so I've decided to stick with them.  It's cool to have your bank in lots of places while traveling. 
     I thought about a couple credit unions in my area, but they both close at 5pm on Fridays and are not open on weekends.  They are also far from where I work, so it would be hard to get there during lunch hour.  If one of them were open just a few hours on Saturday, I would probably go for a credit union.  But it's just too inconvenient.  Chase stays open until 6pm, so it's easy to drop by after work, and they are open on Saturdays.
     The thing I hate about Chase is that my Savings was free until it dropped below $500 (I think), now there is a monthly fee, even though I've had over $500 for a long time now.  When I ask how to get back to free savings, they try to steer me to automatic transfers to activate fee-less savings.  I can't get a straight yes or no out of them if there is any other way.  They are like stepford wives, programmed to only talk about automatic transfers.  Do they get fired if they say a simple "yes" or "no"?  Is that really so difficult?

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

#112

Post by rkalla » Fri, Sep 30, 2011, 6:00 AM UTC

sliverstorm wrote: post #58

Suan wrote: post #50

Earlier quoted context omitted.

Reminds me of something I tweeted a while ago: "Something's wrong when its easier to earn credit card cash back than interest on savings..." http://twitter.com/#!/suanyeo/status/106413797811568640

Maybe from the mile-high view, but the reason cash rewards work is because the credit card company is essentially sharing part of the fee they extracted from the vendor with the customer. Fundamentally different than interest on savings.

I wish to god I had the link handy, but I saw the "Rewards" programs explained in painful detail before and actually shows that the card companies do no sharing of the profit margin, the 1% or 2% comes out of the retailers pocket on the backend when the transaction is processed.

In this particular article it talked about that being the reason why some retailers discouraged processing charges with certain cards that have typically higher rewards.

Sorry for the hand-waving, I know that is the worst way to make a point... "This guy I know told me that his friend said..." :(

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

#113

Post by cube13 » Fri, Sep 30, 2011, 6:18 AM UTC

quintinsykes wrote: post #80

blhack wrote: post #54

Earlier quoted context omitted.

>it drives Americans to use more credit. Oh it does not. $5/mo is just a way for BoA to disincentive people from using their debit card. It means more transactions get pushed through VISA network, more fees for visa, and probably a kickback for BoA. My check card can also be processed as credit, and it usually is. This isn't because I'm buying things on credit, it's just that that's how it is being processed. The mon…

The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit". Either way, they still know it's your debit card that was used even though PIN and Signature debit transactions arrive at the bank through separate networks, so you'll probably get hosed with the fee unless you're in one of their "premium" accounts. Community b…

>The bank likely won't care if you use your card with a PIN ("PIN debit") or with a signature ("Signature debit"), which you refer to as "processed as credit".

Mine does. They have a $1.50 charge whenever I use my PIN for non-ATM transactions. If I sign, there is no fee. It's been this way for the last 10 years I've had a debit/checking line with them.

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

#114

Post by JoshTriplett » Fri, Sep 30, 2011, 6:21 AM UTC

goodweeds wrote: post #72

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…

If you want to research a foul way of doing business, read up on Chexsystems and the collusion of major banks with national check-cashing firms. 20 years ago a consortium of bankers got together and essentially said, "if we build a credit-report system for bounced checks, we can limit our liabilities from poor people and make them give us 3-5% of their income by blacklisting them from all the nation's banks".

Blacklisting people who bounce checks seems a lot more reasonable than many other banking practices. Don't bounce checks; you're committing a form of fraud, providing a promise to pay money you don't have. I see nothing wrong with refusing to do business with people who regularly commit fraud.

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

#115

Post by laaph » Fri, Sep 30, 2011, 6:40 AM UTC

patrickc wrote: post #106

ramchip wrote: post #62

Earlier quoted context omitted.

> WalMart spends about 3 million every year moving pennies around -- that actual coin type I tried googling the data but I didn't find it. Is there a reference for that?

Yes. Google walmart "moving pennies" and click on the first result

Please don't use google as a reference. Please, when you want to make a reference, use anything else.

The first two results are to hacker news (this page!) and after that the results are to pages about penny stocks.

http://www.google.dk/search?q=walmart%20%22moving%20pennies%...

I know my google-fu is worthless but I can at least follow directions, and it still comes up with nothing.

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

#116

Post by goodweeds » Fri, Sep 30, 2011, 7:07 AM UTC

JoshTriplett wrote: post #114

goodweeds wrote: post #72

Earlier quoted context omitted.

If you want to research a foul way of doing business, read up on Chexsystems and the collusion of major banks with national check-cashing firms. 20 years ago a consortium of bankers got together and essentially said, "if we build a credit-report system for bounced checks, we can limit our liabilities from poor people and make them give us 3-5% of their income by blacklisting them from all the nation's banks".

Blacklisting people who bounce checks seems a lot more reasonable than many other banking practices. Don't bounce checks; you're committing a form of fraud, providing a promise to pay money you don't have. I see nothing wrong with refusing to do business with people who regularly commit fraud.

Wow. I was in chexsystems for seven years. My fraud was that two automated payments to PG&E and Speakeasy bounced. Why did they bounce? A woman in a volvo ran a red-light while I was commuting to my stupid dot-com job, causing me to spend a month in the hospital, half of that in and out of a coma. I had no friends or family nearby to visit me, let alone to tend to my finances while I was incapacitated. I'm an engineer, I don't mind the $5k/year vig I had to pay to the loan-sharks (because banks won't turn large checks into cash if you don't have an account with them, even though they are valid checks written off of accounts with them). I don't mind having to go to the ghetto to visit these loan-sharks. I don't mind that I couldn't get a car-loan, a mortgage, student loans, a credit card, or a lease without a co-signer. I still survived, I just went through an incredible amount of stress and inconvenience. I still don't mind, life is suffering. I accept that.

What I do mind is the needless suffering my very poor aunt has to endure because of this extortion aimed at the poor. She nets about $14k/year, without health-insurance, from serving lattes to entitled engineers like myself. Of that $14k has to spend $700/year to the same loan-sharks. Her "fraud" was assuming that debit card purchases would be reflected instantly when she carefully checked her account before paying her utility bill two years ago.

She made a mistake that frankly she wasn't educated enough to anticipate was even possible. Now she's suffering needlessly for it.

For a person in the real world, you know the one who serves you your half-fat breve latte with a twist, foam and room, the system has refused to do business with her in order to extort enough money from her to ensure that she can't climb up any ladder.

Yeah, fraud.

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

#117

Post by justincormack » Fri, Sep 30, 2011, 7:44 AM UTC

jerf wrote: post #74

seanalltogether wrote: post #41

Earlier quoted context omitted.

I also understand that maintaining roads is not free, however I'm not paying fees to private companies for the privilege of using them because of how important they are to national infrastructure. I should be paying less overall in taxes to maintain these roads then I would be paying a collection of individual for-profit companies to get the same level of service...in theory. Is digital currency still too immature to…

Real costs are probably higher than you expect. Sure, it's so cheap it might as well be free to write a program that debits one number and increases another and run it a few billion times, but reliable financial systems require more than that. Consider what it takes not just to implement a chargeback, but to be able to implement a chargeback, and to be able to stand behind it legally, and to be able to defend against…

Is there any evidence that there is a competitive market driving the prices down though? Looks like this regulation was designed to push down costs by fiat, but people wanted to keep their profit margins and shifted the costs, so no worse than what you are saying the government would do. The government should be trying to design cmpetition into the system.

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

#118

Post by pyre » Fri, Sep 30, 2011, 7:45 AM UTC

electromagnetic wrote: post #88

pyre wrote: post #45

Earlier quoted context omitted.

One difference between debit and credit is when they do things like authorize payments, but then never actually capture them. When it comes to debit cards, some banks will pull that money out of your account, and not release it until may be 10 days after the authorize expires. On the other hand, these things can happen instantly (or within a day) on a credit card. Some people are rather annoyed when they do something…

I know the standard when I've stayed at hotels that do accept cash (AKA Debit) they wan't $100 or more as collateral, I assume to avoid the whole problem you just described. However, what I didn't know, which I soon realised was that the hotels pre-authorization hits like $500 on a room I pay $50 for a night. I found this out when I'd just moved country, had zero-credit, had a single $1000 visa card and was planning…

Authorizing an amount, but never capturing it ('capture' is the industry term IIRC) is a hack on the system so far as I'm concerned.

1) I've gotten security calls from banks before just because some gas stations were authorizing the card for $100 prior to capturing for the actual amount of the gas. It even took the person on the phone a while to tease out that it was a $100 auth and not a $100 purchase.

2) The hotels a authorizing for a large amount because they want to make sure that you can pay for damage. They don't care if it goes on your credit. They get their money, then payment just becomes a matter between you and your credit card company. Note that not all hotels will authorize for $500.

  > I don't get the logic behind extending someone credit and
  > then allowing it to be held-up in pre-authorization that
  > will never get processed for the full amount

Technically, the full amount can be captured until the authorization expires or they capture for a smaller amount. That is why. They don't want you to max out the card, and then have a $500 capture that they weren't expecting. Oops! You're $1500 in debt now on a credit card with a limit of $1000!

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

#119

Post by merijnv » Fri, Sep 30, 2011, 8:12 AM UTC

codecaine wrote: post #63

fun fact: In Germany it's exactly the other way round at least for 99% of the banks. You will get a free debit card at every bank but you have to put down a considerable amount of money as prepayment for a credit card additionally to the yearly fees. If you want a Deutsche Bank credit card they will lock 1000 EUR before they issue it to you and you will pay around 60-100 EUR yearly.

I think this holds for significant parts of the non-US world. In the Netherlands (and for that matter any European country I've visited) credit cards seem extremely uncommon. I am one of two people in my circle of acquaintances who owns a credit card and I only use it for buying stuff on-line (when no other option is available).

As I understand it you can also only get money from an ATM associated with your bank, making picking a bank an availability issue too. Here you can get money from an ATM not associated with your bank once every 24 hours, making ATM availability pretty much a non-issue.

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

#120

Post by nitrogen » Fri, Sep 30, 2011, 9:05 AM UTC

jcampbell1 wrote: post #56

Lewisham wrote: post #26

Earlier quoted context omitted.

I really like Ally. I was a little hesitant about them based on their GM past, but now I've switched I'd never go back to a brick and mortar. People always ask me the same questions: Q: How do I get money out if there are no ATMs? A: I use any ATM, Ally refunds the fee, so even those sleazy but oh-so-convienent ATMs are great. Q: What if there's a problem? A: When is the last time you saw your bank manager? I never s…

If you have high balances, you should consider "bank of internet". The name sounds like a joke, but they are similar to Ally in terms of services, but offer money market rates on the checking account. I use them, and don't need a savings/money market account, so it really simplifies things. They also don't charge foreign exchange fees, and their method for computing atm fees is the amount mod $5. When I was living in…

amount mod $5

How does that work at ATMs that only give out $20s? n20 mod 5 is always zero. Unless, of course, "amount" here refers to the withdrawal amount plus* the ATM owner's fee?