Bank of America announced Thursday that it will begin charging a $5 monthly fee for debit cards, a move that may directly affect UC Berkeley students who often have to make the decision between cash or card.
This “debit usage fee” will apply to anyone who uses their debit card to make a purchase but will not be applied to those who use their cards solely for ATM withdrawals, online bill payments or mobile phone transfers, according to Anne Pace, spokesperson for Bank of America. The new fee will go into effect in early 2012.
The move to begin charging a monthly fee for debit cards is likely to directly impact the bank accounts of UC Berkeley students, as three Bank of America branches are located just off the campus.
When asked about the new Bank of America fee, many students expressed discontent.
“I don’t like it and I don’t think that a lot of people do,” said UC Berkeley sophomore Ely Niroomand.
While Niroomand said she will likely continue banking with Bank of America, other students said the $5 fee may convince them to join a new bank.
“That’s sad — that’s really sad,” said UC Berkeley sophomore Tiara Shands, adding that if fees become excessive, she “will probably switch banks.”
UC Berkeley currently has Bank of America ATMs at various locations on campus, but it is not clear if these are indicative of a larger deal between the campus and the bank that would provide fee protection for students, according to campus spokesperson Sarah Yang.
Other banks — including Wells Fargo — are expected to follow suit, and some have already implemented their own debit card charges.
“Similar to other financial institutions, Wells Fargo plans to test a … (f)ee of $3 a month when a customer makes a purchase … with his or her personal or business debit card,” said Ruben Pulido, spokesperson for Wells Fargo, in an email.
The Wells Fargo debit card fee, which will enter a limited pilot phase starting Oct. 14, will affect customers in Georgia, New Mexico, Nevada, Oregon and Washington, Pulido said.
“We have not specified how long the pilot test will run,” Pulido said.
Wells Fargo may extend the fee to other states but any expansion “will be dependent of what we learn from this,” Pulido said.
Banks claim the creation of new debit cards fees is largely in response to new financial regulation that reduces the maximum fee banks can charge for debit card transactions from 44 cents to 21 cents.
“(It is a) result of recent regulation, and the economics of offering a debit card have changed as a result,” Pace said.
The move is seen by many as a way for banks to recuperate the funds lost because of the new transaction cap, according to the Los Angeles Times.
[youtube http://www.youtube.com/watch?v=3ZtCUOvZjnk&w=560&h=315]
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Shop around! many banks will continue to offer totally free checking. especially regionals and credit unions.
Do the math and you’ll see that BofA – and several of their
co-conspirators – are using Durbin as an excuse to jack up fees to
consumers. My calculations show me that
the $60 annual fee BofA is charing for debit cards is a $1.67 BILLION dollar
profit windfall – give or take a hundred million.
Here’s my math – tell me what you think. Don’t like my math?
Tell me yours.
Fees BofA charges to retailers will shrink from 44 cents to
a cap of 24 cents for an average debit card transaction. That’s a savings of 20
cents on average for the merchant – or a revenue reduction of 20 cents per
debit transaction, depending on which side of the fence you sit on in this
debate. These are Visa’s numbers, not mine.
Here’s where the math gets simple. If the “average” BofA debit
card holder make 300 debit card transactions per year, then BofA might be able
to justify the $60 fee (twenty cents lost revenue times 300 transactions equals
$60). The reality is fewer than 2% of consumers use their debit card more than
300 times a year.
Our analysis of bank data and Federal Reserve stats shows the
average debit card customer “only” uses their debit card about 84 times a year.
Do your math and you’ll see twenty cents times 84 transactions is $16.80). So,
with the new fees, BofA has effectively dinged you and the average debit card
holder $43.20 ($60 minus $16.80), while blaming your neighborhood dry cleaner
for the fuss.
38.7 million people carry Bank of America debit cards. That
means Bank of America will earn an extra $1.67 BILLION dollars MORE than
pre-Durbin, thanks to their not-so-sneaky attempt to blame Durbin and your
neighborhood dry cleaner.
The bottom-line is that Durbin is doing exactly what
retailers wanted all along: Durbin has lifted the secret veil and put these
abusive fees in front of consumers. Thanks to Durbin, my business will save
money. And yes, I am passing the savings on to my customers.
The Durbin Amendment is solely responsible for the wave of new bank fees. BofA and all other big banks are looking for ways to make up for lost revenues and, frankly, I can’t blame them, even as I don’t enjoy paying higher fees.
It’s been abundantly clear ever since the debit interchange limit was first proposed that it was ultimately going to hurt consumers in the form of higher fees and that is precisely what is currently happening. http://blog.unibulmerchantservices.com/banks-discontinue-debit-rewards-programs
I just thought BOA was trying to screw me out of $5/month I didn’t know the sky was faLLING… thanks for the heads up Somebody…
This is Dick Durbin’s fault. Leftist idiots elect politicians like him who promise to make everything cheaper–this is the result.
Like Barry O’Clown saying his HC Bill would bend the cost curve down..LOL
right.
Well this is really stupid considering that most students have “keep the change” enabled on their debit accounts. That means that each purchase is rounded up to the next dollar and the change is transferred to savings, and after a year the bank matches a percentage of everything that was transferred. Last year I got $40-50 through the program. Now that they want to charge $60 a year just to be able to use the debit card, it makes the promotion pretty worthless.
Just take cash out of the Versateller. It’s legal tender; bank cards are not.
Merchants don’t want to pay for the transaction fee so they pass it on to the customers. Banks are sophisticated thieves that will charge customers for using their own money. The government should have consulted with the citizens before blindly hand out bail money to these banks. Wells Fargo made record profits during the bailouts. With more students carrying cash instead of plastic, the UCPD will be busy; we are going backwards.
From gold bars, to coins, to paper currency, to credit, and eventually Near Field Communication used by Google’s e-wallet which allows payment by waving your phone; the society is being conditioned to lose respect and appreciation of the tangible value of money and savings. We are headed towards a possible scenario where government under a false flag operation, will blame terrorists for a crippling technology attack like an EMP to divorce society from it’s funds. Funds will be absconded in a high-tech robbery away from public knowledge to corporations. The military industrial complex will have a covert political agenda. The convenience of payment is the path of least resistance will be the undoing of prosperity. With funds wiped out, society in less than nine meals descends to chaos, government enacts martial law and resistors are enslaved. Slavery never ended, it was on hiatus. Goods are made in America once again at the hands of slaves, conveniently, world oil supply runs out. Also conveniently, countries that have been making goods for America are demanding better quality of life from their unions or their country is shifting from industry to information. Cheap slave labor comes full circle back onto American soil as the last resort to appease shareholders of multinationals. This will all happen because future generations will be less educated, disenfranchised, and too drugged with entertainment to protest.Cal has a moral duty and needs to stop indulging impressionable-young students of the Business School with their snappy suits and tie, they look so dated in a recession, I almost expect a flash mob to pop out playing “Smooth Criminal”. Look at Oliver Stone’s Wall Street 2: Money Never Sleeps: the cuban cigars, the beluga caviar, the Moet champagne, the G6, the cocaine, the strip-clubs, the food pyramid of the uber class reflects all the spoils of capitalism run amok. Now look at the food pyramid of your average college student or the protesters on Wall Street: Cup o’ Noodles and tap water, 5 hour energy drink to carry us through our 2nd/3rd job. We should have been taxing hard the top 10% from the get-go. These hoarders of wealth are a cancer to society. When you can live completely off of the interest only, there is something wrong with today’s values. The Mega-rich buying homes they never been in as an investment, while families have their modest homes foreclosed on. Cal, Wharton, Stanford, and other business schools shoulder the academic burden of the blame for what is a crisis of ethics in the marble echelons of our society. The government can’t police graduates who pollute the markets with perverted ideas of wealth. Cal must instill moral values to it’s business students on what’s best for society not what’s best for shareholders. Democracy thrives on the consent of majority and not the privileged minority. If nothing is learned from this then we are to repeat it, but this time there may be no more golden parachutes left to offer.
The very greedy nature of corporations prevents them from being honest. It’s not their nature.
You need to get a life and or a job……..
I have both, I can’t say the same for you.
Somebody, what you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this forum is now dumber for having listened to it. I award you no likes, and may God have mercy on your soul.
Have you not open a newspaper in the last three weeks? It’s time to put down AngryBird and grow up. OccupWallSt movement is clearly evidence that society is at the mercy of the rich who run these banks this very article suggests.
Cell phones have replaced wristwatches and will replace wallets as means of payment. I’m a Google shareholder and this is what they report as the evolutionary way of using money. Just open the app, type the PIN, and wave the phone near the reader. The receipt is then emailed. Years from now, I’ll be proven right. You probably live in a cave of ignorance. You must be comfortable with the banks charging you fees based on how you use your own money. Nobody should associate themselves with you.You don’t belong at a university if you don’t recognize a rational thought about macro and micro-economics merging with wireless technology.
Sorry, I have to agree with JJMMC, but just out of curiosity, how many bong hits did it take you to complete your post again?
Zero. I don’t involve in stereotypical immature pastimes.
I’m quite sure one day, if it hasn’t happened already, the world will pass you by, and you find yourself illiterate in technology. The digital divide does not discriminate.
Excuse me for warning that the banks are separating you from your money with fees that are illegal. If you knew rich people like I do, you would know their world is so much more different. Their crisis was superficial but force the government to bail them out anyway. After making record profits at banks like Wells Fargo, some banks returned the bailout+interest. How are we suppose to take banks seriously if they cry wolf all the time?
For rich people, death is less scary than becoming broke. They game the system so their grandchildren don’t have to work. The men want their country clubs and private jets, the women want their spas and unlimited shopping, the daughters want a pony, the sons want a luxury car at high school. All of this, and they won’t pay taxes, what a spoiled lifestyle. When that’s jeopardy, they ask the banks to bail out their industry so they can resume the champagne and caviar lifestyle. The government did’t bail out more noble industries like education which is suffering just as much.
Look at the CollegePrep as a model, a 30K+/annually private high school in Oakland for the rich oligarchs to send their children. These kids have cars more expensive than their teachers. At the young age of 18, these kids already have a Mercedes! They must feel incredibly empty as a human being. By the time they finished high school, their parents have spent $120K. This is so stupid that they spend that much that could have paid for a law degree at a college. They treat colleges as fashion houses, their noses turned up for anything less than an Ivy. One could argue, that without their parents money, the students would be outright dumb. Yet they go on infiltrating our colleges, companies, and government with their perpetual immaturity.
For example, look at the number of traffic cameras surrounding the Grocery Outlet near the marina, poor people rely on it for employment and as customers. It’s entrapment for minorities who frequent there. If you’ve been to rich Irvine or Pebble Beach, there’s no effort by the city to install cameras, they’ve been paid off so the rich can drive around in their Aston Martins and Ferraris at any speed. The ratio of blue collar criminals against white collar is more proof that the rich operate above the law.
You need to open your eyes and notice the class warfare that’s going on.
These business schools students are encouraged to dress like nancyboys conditioned to take the reins from their predecessors and continue with the oppressive capitalism.
The rising costs of college tuition across the country is a choke-point, to ensure the next generation has just enough leaders to rule over the working class. Brave New World.
Only the ignorant would disagree.
It’s all true! And Martians are behind it.
I’ll pay 5 for the convenience. If you don’t like it, change banks or get a credit card and pay the balance every month if you have enough self control.
Changing banks won’t do anything since they all are going to start charging debit fees. Wells Fargo are running a pilot program in some states, then other states to follow. The banks are reacting to new laws that make them take less from merchants per transaction, about half. Now the banks are going after the customers. Changing banks is like changing thieves, still going to get mugged. Credit cards are the worst invention ever. They’re worse than the tobacco industry, at least they’re more obvious. The prepaid credit cards are stupid. The banks no longer give reasonable interest in savings = 3cents, they charge you for holding your cash, might as well cut the middleman out. Time to look into the CreditU.
Just use cash and pack some heat.
The banks are a bunch of cheapo anyway, they still chain their pens to the counter, how lame. Even the gas stations give free pens. Banks charge for fraud protection and identity theft, wow, way to acknowledge the victim. They always hire the cheapest security guard with the dentures and orthopedic shoes(Walmart not hiring?), wow, I feel really safe putting my money here (sarcastic), never an ex-SWAT type guy at the door. Gramps is liable to piss his pants and have a seizure during a hostage situation. And the bowl of free candy in the lobby? It’s always last years Halloween candy leftovers. Hated waiting in line anyways, they always build like a dozen windows, but put out one or two tellers at a time. What a stupid operation. They completely ignore your do not call list and interrupt your dinner. They send you mail about services that you are already in wasting paper and adding to trash. The commercial landscape of America is nothing but cell phone stores and banks and Starbucks= tragic. The banks are pissing everyone off…
But at least foreigners know we are hopped up on caffeine and twittering/texting to our friends and family how much the banks are screwing us.