Bank of America has announced that it will now be imposing a fee on any of its customers who use their debit cards to make purchases, starting in 2012. The fee will be five dollars a month which when added up amounts to sixty dollars a year. Many customers are up in arms about the new fee and are ready to leave Bank of America as soon as possible, myself included.
The new fee does not necessarily affect everyone who banks with Bank of America, but the bad part of this is that those who will have to pay the fee are those who are most likely to not be able to afford the fee. The fee will be charged to anyone who uses their debit card to make purchases at a store, no matter if the card is used only once or a hundred times. If the card is only used at the ATM however, customers will not be assessed the fee. Also those who have at least $20,000 in their bank accounts and those who have a mortgage with Bank of America will not be assessed a fee.
Still, those of us who don't have enough good credit to buy a house and don't make enough to have $20,000 in the bank at once will start having this fee. For many customers it feels like Bank of America is penalizing them. This is causing a lot of customers to commit to switching banks, but surprisingly a good number of others are sticking with Bank of America despite the fee.
Of course most people who continue to bank with Bank of America will be those who are not affected by the fee. But even those who will start to be assessed the fee may decide to stick it out anyway. Some people are willing to pay the fee for the convenience of Bank of America's branch and ATM locations. Others will stick with it for the convenience of not having to switch over all their funds and direct deposits. And surprisingly enough, there are also those who just don't care that they are being charged this extra five dollars even though switching to another bank may mean they wouldn't have to pay. This is sometimes due to loyalty to a bank that has been an excellent financial provider for them in the past, or simply because they may not have time to worry about the new fee.
But when other banks, such as Wells Fargo who has already announced a similar fee plan, are jumping on the bandwagon with this fee idea where are the customers who are fed up going to go? One option is Citibank, which has so far claimed that it will not be adding the monthly fees for its customers. There also may be other banks that choose not to add the fee, in hopes of taking over all the customers who are fleeing Bank of America. These could become options for customers, but it is necessary to be wary when switching to a bank that claims it will not implement the fee. It may not be implementing the fee at first, but this could land customers in the same spot they're in now if the bank decides to change its mind a few months later.
Another option for some customers is to switch to a credit union. The problem here though is that the credit unions only accept certain customers and it may be difficult for customers to get in to a credit union. Here in North Carolina we have the NC State Employees Credit Union, which has an excellent checking program, but unfortunately it is not open to everyone. Only state employees and their direct relatives are eligible to bank with the NCSECU. But there are still options for customers who are not eligible for most credit unions. New websites are popping up online to help customers find credit unions that will accept them.
One last option is to withdraw money from the bank altogether and start working only in cash. But in the digital age this may be more hassle than it's worth. Many businesses are starting to only pay their employees by direct deposit, though some companies who do this may have some hidden options for employees who don't have bank accounts. But working only with cash eliminates the ability to shop online unless the customer makes all their online purchases with credit. As we have discussed in some of our previous articles, purchasing on credit can help credit scores but it can also hinder, so customers should be wary about taking this financial route. There are also many stores who are no longer willing to take cash, which could become a hassle for those who choose to start working with only cash.
Any way you spin it this new fee is not great for consumers. Because consumers will have to start looking into other financial options this new fee may start to affect some people's credit scores. And because of that this may be added to the list of ways that people are winding up with bad credit through little to no fault of their own, like we discussed in our article 8 Missteps to Bad Credit.
Jessica Harmon is a staff writer for Scott McCorkle's Credit Capitol. If you would like more information on how we can help get you an auto loan today, please visit our website!