Bank of America to charge $5 monthly fee for debit card purchases

Discussion in 'Business & Economics' started by KilljoyKlown, Sep 29, 2011.

  1. KilljoyKlown Whatever Valued Senior Member

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  3. adoucette Caca Occurs Valued Senior Member

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    Not really fair.

    Our world would really suck without banks.

    Someone has always had to pay for all the infrastructure and processing associated with the issuance of over 500 million cards and processing of nearly 30 Billion Debit Card Transactions each year and the monthly billing and settlement with all the merchants and consumers and the losses associated with it. (it is a substantial amount of money)

    That used to be the merchants, based on a small percent of the Transaction.

    But the FEDs cut the Merchant fees in half starting last June and someone has to make up the difference.

    For BofA, that's $2 Billion dollars and though I think the FED sucks for doing this as it is a very regressive move, but if the merchants cost has been cut in half then obviously the users SHOULD make up the difference.

    There really is no such thing as a free lunch.

    Don't want to pay the $5 month, then use a Credit Card and pay it off each month.

    Poof, you get your $5 a month back.

    Arthur
     
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  5. gmilam Valued Senior Member

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    There's also this stuff called cash... and for most purchases it works just fine. Larger purchases I put on my credit card, which I pay off at the end of each month.

    The credit card companies have never made a penny interest off me.
     
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  7. KilljoyKlown Whatever Valued Senior Member

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    Your right, but it doesn't change how I feel about those money grubbing banks that are always looking to make their money off the people that can least afford it.
     
  8. Repo Man Valued Senior Member

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    B of A lost me many years ago, when they instituted an "in branch transaction fee". If you only had a basic checking account, and you walked inside and had a teller do something you could have done with their ATM, they charged you for it. That motivated me to move on to a local bank that had lower fees in general.
     
  9. KilljoyKlown Whatever Valued Senior Member

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    One of the things they did to me, is I wrote about a dozen checks with enough in my account to cover 11 out of the 12. The 11 smaller checks were mailed on Wednesday and the mortgage was mailed on Friday. First thing Monday morning I deposited enough to cover the mortgage and went about my business. A few days latter I started getting a bunch of bounced check notices, each one costing me a $30 penalty. I called the bank to find out what happened and was told they paid by the order they received checks. They couldn't tell me how the mortgage check came in before the other 11 checks I mailed 2 days ahead of it. I then asked how they were bounced before my Monday morning deposit and was told they were all processed over the weekend, so it didn't matter if I deposited any money first thing Monday morning. They wouldn't give a break on any of the bounced check penalties and as a result I didn't have enough money left in my account to cover all my checks. 5 of them were left without enough funds, and each of those companies submitted those checks twice more that week, to add another $300 dollars to what I owed the bank. I ended up owing the bank almost $600 in bounce charges.
     
  10. The Esotericist Getting the message to Garcia Valued Senior Member

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    No it wouldn't, it would be a lot more wonderful. IMO there would be more love, compassion, cooperation, and a lot less envy, hate, guilt, greed, judgement, violence, and I imagine, war.
     
  11. chimpkin C'mon, get happy! Registered Senior Member

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    That's why I left B of A.
    I was with WaMu, then Chase ate them...
    and Chase wanted to start charging 5$ for holding my money if my bank account dipped below $1k.
    Being poor, it does that...
    The car needs work? well...the Japanese Princess takes a lot in labor because she's a screaming PITA to work on...

    So, I found Poky Local Credit Union, that pays me 3% interest to hold my money for me.
    And uses my $$$ to give loans to local small businesses instead of gambling with it on the stock market and destabilizing my economy.
    So I win, they win, my local economy wins, my country wins.
    Woot.
    The only issue I have is there are exactly two branches...but I can't afford to travel, so, no problem so far.
     
  12. The Esotericist Getting the message to Garcia Valued Senior Member

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    Most companies really only just want their money. And you don't really need to worry about your credit rating any more if you live in the U.S. In this economy? They just want people with a job making money. Especially if you can contest any marks on your report, and I think you have a just case. Added to that, I'm willing to bet, once you clear this up with all the people who got your bounced checks, the only institution you need to worry about screwing over is BoA. From everything I have read? Either they are already screwed and are going down, or the country is going down with them, so don't worry about them and your credit rating too.

    So take all your cash out of BoA, and open up a checking account, debit card w/ a credit union credit card VISA/MASTER w/e account at a CU. Contact the people you owe your debts to, explain that it was the idiots at BoA that don't know how to bank, you know, the same folks that brought us the awful economic bad news, recessions, failed derivatives and sub-prime loans, etc. who were the one's that screwed up your account, and are probably trying to squeeze you for more. Pay these guys what you owe them, and if they still want their bad check penalties, have them make payment arrangements with you or your new CU. I am nearly 100% all of them will be more then understanding and very generous with your situation. Added to that, you will have found a new financial family, and they will very likely have a line of credit called an over-draft account, usual from a 12 to 13% interest rate on short term low principle loan that automatically kicks in should this happens again. It's a pretty high rate, and can be painful, buts it's still much lower than the fees at banks, and you are only penalized on the amount that is needed to cover the check that you are short. CU's aren't criminals, they train you to manage your finances better. Mine has been $300 bucks since I was 16 and I have never needed to increase that amount. That's always covered my, "ooopses." lol
     
  13. The Esotericist Getting the message to Garcia Valued Senior Member

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    lol. Yeah, that is the one draw back with a CU, to be sure. There are ways around it, but not like the convenience of banking. However, I so despise banks, my CU VISA check card and cash will suffice for almost everything. But yeah, I'm pretty much not in any position to travel either, so a CU is the way to go. Community oriented.
     
  14. The Esotericist Getting the message to Garcia Valued Senior Member

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    2,119
    I can't imagine a CU to be so stupid and criminal as to charge $5 monthly fee for debit card purchases, what insanity. The members would never vote that upon themselves. They would throw the administrators out on their asses at the yearly meeting for such a move. Or else go else where. . .
     
  15. cosmictraveler Be kind to yourself always. Valued Senior Member

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    The early 1970s saw institutional involvement. The Conference of the Finance Ministers of the Islamic Countries held in Karachi in 1970, the Egyptian study in 1972, the First International Conference on Islamic Economics in Mecca in 1976, and the International Economic Conference in London in 1977 were the result of such involvement. The involvement of institutions and governments led to the application of theory to practice and resulted in the establishment of the first interest-free banks. The Islamic Development Bank, an inter-governmental bank established in 1975, was born of this process.

    The first modern experiment with Islamic banking was undertaken in Egypt under cover without projecting an Islamic image—for fear of being seen as a manifestation of Islamic fundamentalism that was anathema to the political regime.[citation needed] The pioneering effort, led by Ahmad Elnaggar, took the form of a savings bank based on profit-sharing in the Egyptian town of Mit Ghamr in 1963. This experiment lasted until 1967 (Ready 1981), by which time there were nine such banks in country.

    This section requires expansion.

    In 1972, the Mit Ghamr Savings project became part of Nasr Social Bank which, currently, is still in business in Egypt. In 1975, the Islamic Development Bank was set up with the mission to provide funding to projects in the member countries. The first modern commercial Islamic bank, Dubai Islamic Bank, opened its doors in 1975. In the early years, the products offered were basic and strongly founded on conventional banking products, but in the last few years the industry is starting to see strong development in new products and services.

    Islamic Banking is growing at a rate of 10-15% per year and with signs of consistent future growth. Islamic banks have more than 300 institutions spread over 51 countries, including the United States through companies such as the Michigan-based University Bank, as well as an additional 250 mutual funds that comply with Islamic principles. It is estimated that over US$822 billion worldwide sharia-compliant assets are managed according to The Economist. This represents approximately 0.5% of total world estimated assets as of 2005. According to CIMB Group Holdings, Islamic finance is the fastest-growing segment of the global financial system and sales of Islamic bonds may rise by 24 percent to $25 billion in 2010.

    The Vatican has put forward the idea that "the principles of Islamic finance may represent a possible cure for ailing markets."

    http://www.google.com/url?sa=t&rct=...eVs70f&usg=AFQjCNHf9ZbW-lSccG2ADmdbo8YD8J50aA
     
  16. adoucette Caca Occurs Valued Senior Member

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    So, this saga starts with you writing a bunch of PAYABLE ON DEMAND checks for which you didn't have sufficient funds in the bank to cover and this is against the rules you agreed to when you opened the Demand Account at the bank.
    By the way, doing this on purpose is illegal in most states.

    So you were counting on the mail being delivered and processed and the checks deposited in the Payee's bank and then sent for collection at the Payor bank in the date order that you mailed them?

    There is no logical basis for that.

    Mortgage companies often have local "Lock Boxes" at the post office that gets them faster and also after hour delivery, allowing for faster collection of those checks.

    The Mortgage company's Account's Receivable system those payments are run through is also highly automated and typically the check will be sent for collection the same day that it is received because the checks will be processed via an electronic image and collected via transmitting an Image Exchange file from the AR processor to BofA the SAME DAY the payment is received. (See Check 21 law allowing an electronic file of images to be used instead of clearing the actual paper check, passed after 9/11) In contrast, those small checks were likely going through less sophisticated processing systems and being handled mainly as paper, not images, ie. slower.

    Then consider that the bank's Business day is not the same as a Calendar day.

    They will process incoming Image Exchange files, ATM withdrawals, DC purchases etc against Friday's Balance well into Sunday. So all items that come in Friday night and all during the day Saturday are all processed as Friday's work.

    And yes that is standard practice throughout the banking industry, and of course it is both ethical and legal since you agreed when you opened the account to NOT write a check for which you didn't have funds already on deposit to cover.

    So what, you spent the money (wrote the check) on the week before.

    What? The bank is supposed to know how long the mail delivery & payment processing takes for all these OTHER institutions?

    Do you really think depositing the check on Monday would have necessarily prevented this?

    What you gave the bank was a piece of PAPER.
    When those checks come in from other banks the paying bank has to settle with MONEY the same day.

    That evening, after the branch closes those deposited checks are picked up and processed and then presented to the bank the check was drawn on and depending on time/distance that check you deposited on Monday won't become money for the bank until at the earliest Tuesday (but possibly as late as Thursday)

    So even if those checks had come in on Monday you would still have been "Drawing against Uncollected Funds".

    And the bank could still have returned them (though if you have a long standing account in good standing and the amount is not that large, they generally don't)

    That says something about the average balance in your account.
    Maybe you don't realize it, but a free checking account that maintains a low average balance account and with that many checks written against it, costs the bank quite a bit per month. Each check that is paid normally, costs about 30 cents to process, and about $2 per month for the Statement and support costs, but each EXCEPTION (and a returned check is an Exception that has to be found and handled manually) can cost $10 or more to process, which is why asking them to "give you a break" is really simply asking them to pay for your mistake.

    Of course they redeposited them. When you mailed the items they assumed that you had the money to cover them so what else are they supposed to do?
    By the way, each time those items were returned to the businesses as unpaid items both the banks and the businesses incurred substantial costs for processing these items as exceptions.

    And so you blame the bank for YOUR mistake?
    More to the point, the bank provides low to no cost options that prevent over-draft charges designed to handle situations like this.
    I know BofA tried to get you to sign up for it.
    Every bank does, because automated auto-draft protection is so much easier on everybody.

    But you probably thought the bank was trying to rip you off.

    Wrong.

    Arthur
     
    Last edited: Sep 30, 2011
  17. adoucette Caca Occurs Valued Senior Member

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    Do you think processing Debit Cards is free?

    Do you think ANY CUs actually run their own DC network and do their own DC processing?

    No, they all buy that on a Card/Transaction basis and since the FED, last June (it goes into effect this October), cut the revenue the DC processors got from the merchants for DC transactions in half that has to be made up somewhere. The DC processors run the nationwide real time communciation network, do the transaction processing, settling with all the participants, deal with all complaints/issues, eat most losses from fraudulent activity, and that costs a lot and the DC processors have to pay for this just like before and they will indeed pass on the costs they can no longer collect from the merchants on to the card issuers.

    The CU will then have to decide how to pay for these increased charges.

    A $5 month charge for users of the Debit Card service would be both fair and logical.

    Or do you believe you should get a "free lunch"?

    Absolutely they will, or do some other funding option, but still someone at the CU has to pay and the DC users are the most logical choice.

    Arthur
     
    Last edited: Sep 30, 2011
  18. adoucette Caca Occurs Valued Senior Member

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  19. adoucette Caca Occurs Valued Senior Member

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    DUH

    Why do you think they put the Automated Teller Machines in every branch lobby?

    Staffing branches with Tellers sufficient to keep wait lines reasonable is expensive and they are there for the people who need services that the ATMs can't provide.

    But, if you aren't smart enough to use an ATM then the reasoning is that you should pay to have a teller do a friggin simple transaction for you.

    Sort of Darwinian.

    Arthur
     
  20. Rhaedas Valued Senior Member

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    1,516
    The debit transaction fee isn't a big deal for me, as it's only $5 a month. I love how a Fox article is misleadingly titled (like that's unusual) to make it sound like you're getting that $5 taken out per transaction.

    What got me rethinking my BoA account over is how they revamped their tiers of service, which I didn't know about until I got a brand new $12 monthly service fee last month. No mention on the website, of which we check our account daily, that there might be a change and any offer to move to something else. No mention at all now of an easy way to switch, I'm assuming I'll have to call or more likely go down to the branch to make that move. Or I might just move my payments and direct deposit over to my existing CU, which is still a $2 fee and free debit....for now, of course.

    I don't feel sorry for the banks...I think they make profits plenty. But given it's a free market, they can do what they like, and customers can either pay or go somewhere else. That's how it works. I just haven't decided which I'll do yet.
     
  21. adoucette Caca Occurs Valued Senior Member

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    Yes, the Credit Card companies are STILL allowed to charge the MERCHANTS for your transactions.

    But, if the FEDs were to do the same thing on the Credit Cards as they did to the Debit Cards, then the banks would very likely do the same thing and charge a fee for use of the Credit Card.
     
  22. The Esotericist Getting the message to Garcia Valued Senior Member

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    2,119
    Of course they do. It's easy, and convenient. . . and nationwide.

    Please Register or Log in to view the hidden image!


    Please Register or Log in to view the hidden image!


    http://www.co-opfs.org/public/locators/atmlocator/index.cfm

    Do I think processing those cards is free? No. not by much. But I think processing them is easier than using cash. I was once a cashier, I thought customers using them was a bit easier and quicker than using cash. Plus, I think it is the retailers job to pay their employees, not the bank, for transaction "fees," if you consider the employee and the businesses time as money. Why should the retailer pay a computer, a printer and a secretary for stuffing envelopes she is going to stuff anyway? The banks are just crooks, get real. They shouldn't expect the retailers or their customers to pay for those "costs."

    The CU already covers these "costs" now, they aren't about trying to cover losses on the investing/speculation side of the books. When the cost to mail out statements gets to prohibitive, maybe they'll begin charging members for statements for those who don't want to get them on-line. But that's the point, a CU is honest about its business and its costs. . . its a non-profit. A good place to store your cash.


    So yeah, in a way, I guess I do expect to have a free lunch. I expect to be entitled to the lunch I made myself without someone trying to steal ma carrots.
     
  23. adoucette Caca Occurs Valued Senior Member

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    For those who think they are getting ripped off on their Checking account:

    http://www.aba.com/NR/rdonlyres/F0E...nterchangeDataFactSheetFormattedMarch2011.pdf

    Now here's the thing.

    A Demand Account is something that allows you to simply carry a small number of checks with you and thus you can pay anyone, any amount of money you have, based soley on your Signature and if your checks are stolen and someone forges your signature, you are not liable.

    Mine's always been free simply because I keep a reasonable balance.

    Great deal actually.

    Arthur
     

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