The tables have turned– now it’s the banks doing the robbing! The recent public outrage at the nation’s largest bank (BofA) plan to charge debit cardholders a monthly fee for using their cards to make purchases is the latest example. Bank of America’s announcement stirred an unprecedented negative reaction. Senator Dick Durbin even suggested that customers “leave the bank!” Some complained that this amounted to a public figure orchestrating a “run on the bank.”
There are almost 40 million customers with BofA debit cards, and the banks have spent years trying to get us addicted to using them. It was a great business strategy until Federal regulations reduced the transaction fees banks could charge merchants. Then the banks switched strategies. They would charge the customers for using their own money and charge the merchants too! (albeit at a lower transaction fee)
The banks feel squeezed, but not as much as their customers. Banks are in trouble as a consequence of poor lending practices (especially mortgages), new federal credit card and other transaction rules, an economic downturn, etc. But they always find a way to make up their losses. They are moving to reduce free checking accounts, curtail “rewards” programs, raising basic checking account fees, assessing charges for “paper” statements, etc.
And it isn’t only BofA. All the big ones–Chase, Wells Fargo, Citibank—and many smaller ones are doing the same, (although those smaller regional banks are currently exempt from the debit swipe fee limitation).
It’s a giant game. The financial institutions try to nickel and dime you to death, while you try to figure strategies to get the best deal. You can’t be a passive or naïve consumer these days. Misplaced customer loyalty or habitual business relationships may not be helpful to your finances. Switching to a Credit Union, paying cash, using “no fee” credit cards you pay off each month, etc., are all options. And, changing banks may be a pain, but you may need to bite the bullet.
