Bank Of America To Start Charging Debit Card Fees

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BofA has come up with a novel way to earn people’s trust after battling one PR disaster after another for the fraud perpetuated by the bank over the past few years.

BofA has decided to charge a nominal monthly fee of $5 every month you use BofA’s debit card.

This will be on top of any other fees your account might have. Remember BofA was bailed out with $45 billion of taxpayer money out of which $5.8 billion was used up to pay executive bonuses. Without admitting guilt, BofA paid $33 million in fines to the SEC for this transgression.

Recently BofA saw its shares soar after Warren Buffett loaned an additional $5 billion to BofA. Soon after BofA announced it plans to layoff 30,000 of its employees in a bid to raise cash.
Bank of america to charge $5 debit card fee
BofA is also the largest bank in terms of deposits, so this will affect a lot of people. And BofA is not alone. Wells Fargo and Chase are also contemplating a debit card fee.

Alternatives
If you are a BofA customer thinking of switching to another bank, this would be a good time to bail. If you joined BofA for free ATMs, you’ll be glad to know that banks such as Ally and USAA provide fee less ATM access. Neither of these banks have a debit card fee. There aren’t any special requirements to join and can be done very easily online.

Or explore local community banks and credit unions. Credit Unions are structured differently and operate as not-for-profit entities with the prime goal of serving its members rather than profit maximization. When you join a credit union you become a member.

USAA, DCU, PenFed are all fine institutions.

On Switching
If you have a direct deposit arrangement with your employer, open your new bank account, fill in the direct deposit modification form, wait till you actually see the money in the new account before closing your BofA account.

Make sure you redirect all auto pays to your new account before cancelling your BofA account.

Looking at BofA’s troubles, I predict this is just the beginning of a long list of fees Bank of America has up its sleeve.

The good news is you don’t have to humor BofA.

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43 thoughts on “Bank Of America To Start Charging Debit Card Fees

  1. I do not use debit cards, but if I did this would push me to leave Bank of America.

  2. Hey man…it takes a lot of nickel and dimeing and bailout money to pay their fat cat bonuses!
    They made the decision years ago that they were going to be a commodity bank – screw the customer.

  3. I can’t believe that anyone still banks with the mega-banks.

    BOA probably loose some customers but the majority of their customers will be too lazy or too confused to move. I know that once you have your direct deposit and bill payments all set up, it can be a pain to move. I sometimes think mega-banks are counting on that pain to retain customers. Like everything else, people need to vote with their feet and their wallets. And I hope a boatload of their customers vote.

    Oh well 5 bucks isn’t that much, “just accept it” like the Ally Bank commercial says.

    I like your article and the tips on switching. I hope a lot of people read it and ditch their mega-bank.

    • $5 may not be much IF the amount comes from a single person’s pocket. Considering the number of account holders BofA has, they are definitely pocketing millions of $$$. Come to think of it, they are already earning when they use the money we bank on them. Now, they would like to earn when you use YOUR money. Got to move my money out of that bank.

      • Tempo has a point. Even without the fee, BofA is a very bad place to park your money. But people don’t switch due to the fear of change.

    • Thanks for the kind words Tempo.

  4. While I believe that this will eventually become a normal part of banking one day in the future as banks try to make up for lost revenue…there couldn’t be a worse time for BofA to roll this out.

    I’m actually in disbelief over the timing of this, which is hard to say, because big banks have left me in a continuous state of disbelief over the last few years. This bank needs a serious shakeup.

  5. Another unintended consequence of Dodd-Frank. Expect more big banks to start levying various fees on their customers. Maybe it’s time to move money to a credit union or a small, local bank, or ally or other more customer friendly institution.

  6. Seriously, why put up with this crap if you’re a Bank of America customer. There are many more banks (like the ones you listed in this post) that are much more interested in providing great service to their customers than BoA is. If you haven’t made the switch yet, now is the time.

  7. Using a debit card is getting less attractive all the time. We stick with our credit union where we get free checking and no-fee debit cards (which we don’t use). It’s a real pain to switch from a bank, but BOA is likely to keep squeezing the little guy. It’s worth it to switch as you’ll probably need to do it sooner or later anyway. Might as well cut them off now.

  8. I don’t use a debit card, but this would make me switch. Guess big banks need to make up their money somewhere. I’m a Wells Fargo customer. They’re thinking of hitting customers with fees, too? Great tips on switching in case I need it, thanks!

  9. I’ve never used a debit card, but to me, this stinks of a company trying to shed customers, kinda like Netflix spinning off its DVD biz, sending a ridiculous email to customers, increasing prices 60% overnight while adding new restrictions on accounts. Perhaps it’s not a very profitable part of their business?

  10. One more reason why I use a small credit union as my primary bank. Rather than sending profits to shareholders, they keep good customer service and avoid many fees.

  11. This only adds to the reasons why I use credit cards. :)

  12. I don’t use a debit card either. It’s not convinient when they keep changing the rules.
    A few years ago after I paid off my Chase and B of A credit cards I went around to my local banks and did some research. I found a bank in my town that offers a credit card without being financed by the big borg banks money. The credit cards are funded by the banks money (AKA the depositors), Visa is used as an instrument. Yes, I was unable to get a huge credit line because of this but I really didn’t need one. The other perk was I was talking directly to the bank vice-president asking all of my questions.

    • The good thing is even though all the big banks will eventually follow this practice, there are plenty of community banks and credit unions that don’t plan on a debit card fee.

      A customer wins as long as there are alternatives.

  13. Wow that sucks! No wonder everybody hates them. Luckily I don’t have a Bofa debit card and my bank doesn’t charge to use mine (yet). Man that’s a huge fee. -Sydney

  14. I have a debit card but I rarely use it. It is linked to account where I get so many free transactions. I don’t seem to ever go over that amount which is great.

  15. I’m interested to see how this plays out. Everyone seems to be upset about the BoA fees, but I’ve taken the contrarian view point on my blog. I don’t have a problem with these fees at all.

    • Hey someone’s gotta pay for those $5 billion bonuses for successfully getting the taxpayers to foot the bill for BofA’s bad deals!

  16. I am so annoyed by this legislation. In fact, it will be mentioned in my next post (small part though). I think it is a disservice to customers. However, I do agree with you. They are counting on a) people switching to the more profitable BOA credit cards and b) people being too busy to go through the annoyance of changing direct deposits and auto-drafts to another bank/credit union. YUCK

  17. I rarely use debit cards, but I hate Bank of America and I cannot wait for my refi to finish and I don’t have to send another dime to that company.

    • Makes you wonder if BofA secretly enjoys bad publicity! Either that or they are clueless as to how annoyed their customers are.

  18. I think it’s horrible that banks pushed debit cards and ATM cards so that they could decrease their teller staff and then they turn around and charge customers to use those very cards! I am very satisfied with my small, local bank’s policies; they make sure that treating the customer right is the top priority.

  19. back to hide my money under the bed, like the old days :p

  20. I wonder if this will be a “New Coke” moment for B of A. Maybe they don’t really care. When the federal government and Warren Buffett got your back, you can afford to be this cavalier.

  21. Seems to me BofA are desperate for money. Now it’s up to the consumer to deliver a message back: bail out in droves!

    No need to be lazy and absorb the fee, plenty of alternatives out there like you pointed out MC!

  22. Maybe it’s because I live in Canada, but I am used to fees like this. Our banks tend to charge a fair bit. I guess that is why I like using a credit union- their fees are a bit more reasonable. I am glad there are some alternatives for you folks though- seems this B of America change has caused a lot of ruckus.

  23. I have BofA account but I never use debit card for anything. If you are not much cash guy like me, and you need cash, go to teller and withdraw cash in large sum so that it an last at least a couple of months. Use credit card for everything else

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