Seriously, this event is just another data point along a long trend of obnoxious fees that rolls us further and further down the slippery slope of expenses that are eroding away our daily finances. Unfortunately, it’s not just the banks, but airlines, energy companies, cell phones, and many others.
So why this latest fee? Just like with airlines, the banking industry is proclaiming that government regulation has added to their operating costs, and they feel the need to pass this on to their customers. Now before someone declares that this is just capitalism at play or that this is what we get when the government intervenes, let me ask you: Do you really think that every fee that rolls out to Main Street America is really for the good of our country? That these fees will somehow generate into jobs? It’s highly unlikely they do anything other than increase stock margins. No, my definition of capitalism does not include taking advantage of the common people. In capitalism, the best business wins. Do you want to show banks you don’t like these fees? Show them they have lost by letting them lose your business.
Recently, when Netflix introduced a hike in their fee structure due to extreme changes in operating costs, subscribers punished the service with subscription cancellations and it resulted in a decrease in their stock value. The YTD return is negative 35%. Click here to read my own farewell satire to Netflix.
If you don’t do anything, these fees simply become the status quo. When the airlines first announced baggage fees, there was grumbling, but over time it has simply become an accepted expense. Soon, Bank of America won’t be the only one to start charging for debit cards. Beyond that, debit cards won’t be the only thing that banks get creative about and start to charge for. What’s next? Fees to deposit your money into their bank!?
What Can You Do About It?
If the fees truly bother you, then start shopping around. Just like most services, there are plenty of substitutes that would be willing to work with you. Consider:
• Local banks: In general, local banks usually do not feel the same pressure that large banks feel to produce profits. Therefore, they would be less likely to introduce such fees or possibly waive them.
• Credit unions: Lots of people swear by credit unions because they have an entirely different structure than banks. Better rates, better service, etc.
• Online banks: Popular online savings account giants Ally Bank and Ing Direct both now have checking account services. In addition, your money earns a little bit of interest.
• Rewards credit cards: Most people who use debit cards don’t like to use credit cards. However, if you fear credit cards and the prospect of high-interest fees, you should know that you can set up automated online payments so that you always pay off your balance and never pay interest – I never have! And you can score some decent cash back. Click here to read my recommendations for the best cash back rewards credit cards.
Remember, nothing will ever change as long as you sit back and allow yourself to pay these fees. Seek out the better deals and give the most important thing that these companies want to those who deserve it – your business!
I know this post is ancient, but as a retail banker, I feel the need to give it a little comment love.
Fees are fees, and while some fees should be charged for certain situations, in all my years of banking, I have never heard of anything as ridiculous as Bank of America’s debit card fees. I’m so glad that they’ve been rescinded rather than becoming an industry norm. Besides the fact that I don’t have the patience to listen to every other customer come in and complain about their fees as is, it really is a service that should be provided at no cost to the customer. People need access to their money even when they aren’t at the bank, and they shouldn’t be punished for it.
But what I really liked was your solution: LEAVE THE BANK!!! In my experience, most people won’t do it. They’ll go out of their way to make the branch staff’s lives miserable, including the tellers (I’ve had a customer literally call a teller a terrorist to her face for refusing to cash a check). They will incite a riot on the line when they have seemingly nothing else to occupy their time. But when it comes time to act like an adult and take responsibility in the form of shopping around and finding a better alternative for themselves, they absolutely refuse and instead continue with the alternative of making life difficult for those around them. I don’t know why they do it.
I’ve always said if Bank A and B offer the same services, but Bank A charges $50 a month and Bank B provides it for free, then you should go to Bank B. The employee or bank’s perspective doesn’t matter; from the customer’s perspective, they should just go to Bank B, rather than staying at Bank A and whining, moaning, and groaning. I would like to see people start doing this, not just for my sake (I can only take so many headaches in a day) but also for their own. EVERYBODY benefits when people take the proper and responsible actions (even if it’s not as cathartic as telling a teller, cashier, deli-slicer, or movie ticket agent that they are all a bunch of $#^!ing #$#%^&^[email protected]$^?>:#’s and they won’t be getting any more of your money) as it turned out to be the case with both Netflix and Bank of America.
I made mention of this somewhat in a blog post that I attached below (I swear, I’m not trying to steal your readers, MMD! 🙂 ). Standing there telling the employees you’re going to leave doesn’t solve your problems; it just creates headaches for others. And creating headaches for others solves problems for no one.
And seriously, whose bright idea was it to institute fees for using a debit card!?
Thanks for adding all this good stuff to this page ARB!