BofA to Charge for Debit Card Use -- Just One Reason to "Move Your Money" From Wall Street Banks
Bank of America made waves earlier this week when it announced that it would start charging customers with basic checking accounts $5/month to use their debit cards (the change will go into effect next year). If my Twitter feed and Facebook wall are at all indicative of American consumers' feeling about the move, then it's safe to say that people are pissed off. And it's not just Bank of America customers who are angry; customers of other major banks are worried that similar changes will be coming to their accounts too.
And indeed, according to WaPo, the "era of low-cost banking" is coming to an end:
The move by Bank of America, the nation’s second-largest bank by number of locations, could clear the way for other banks to institute similar charges. Wells Fargo, the country’s biggest bank, will begin testing a $3 monthly transaction fee in five states starting Oct. 14. Chase piloted a $5 fee in February for some customers in Wisconsin but has not expanded the program.
Banks argue that the fees are among the unintended consequences of the wide-ranging financial overhaul passed by Congress last year.
Actually, major banks have already instituted a number of account changes that are unfriendly to consumers:
The move is just one of the ways banks are overhauling consumers’ accounts in the wake of the financial crisis, which resulted in a regulatory overhaul for the banking system and a fundamental shift in the industry business model. Rather than charge the riskiest consumers the heftiest fees, banks are now spreading their costs more evenly among their customers.
For some banks, that has meant eliminating free checkingor ending rewards programs. Credit card holders have found their spending limits slashed and their interest rates increased. And with a new rule taking effect Saturday that limits banks’ ability to make money from merchants, it also means paying for the privilege of swiping your debit card.
No doubt Bank of America executives think the outrage over a $5/month fee is over the top. I'd argue that the outrage is just misplaced; in the grand scheme of things, debit card fees are small-beans compared to many other problems the Wall Street banks have wrought (see: the 2008 global financial meltdown). But if this debit card fee is the last straw for consumers, then great! The new fee is one of many reasons to leave Bank of America and other corporate banks.
Moving your money out of the big Wall Street banks to small community banks and credit unions is a great idea for a number of reasons: you will get better rates and fewer fees, your comunity banker will learn your name and provide you with more personal service, and you will be keeping money in your local community which increases economic development and eventually, creates more jobs. Yet the most important reason to move your money is to make your voice heard, to stand strong and no longer help a banking system that has run amok
INVEST IN MAIN STREET, NOT WALL STREET
When you keep your money in a local financial institution, that money in turn is reinvested in local businesses, which is important for building a stable economy and encouraging local growth. Put your money in the big Wall Street banks however, and they will use your deposits to make risky investments, gambling at the expense of the economy as a whole.
END TOO BIG TO FAIL
The big banks on Wall Street gambled with our money, then demanded a bailout of $700 billion. The size of these Wall Street “Banksters” threatens our economic system, yet their size has only increased since we bailed them out. According to FDIC data, the largest 5 banks held 13% of US deposits in 1994, today they hold 38%. If the government wont step in and break them up, then we must move our money ourselves and end ”Too Big To Fail” once and for all.
FEWER FEES, MORE SAVINGS
Worried about ATM fees? You shouldn’t be. More and more community banks and credit unions offer ATM surcharge-free networks, providing you with even more access to ATMs nationwide. Community banks and credit unions also charge on average less in fees, and often pay you higher interest on your accounts than big banks. The numbers are clear: the bigger the bank, the higher the fees.
For more information on how and why you should leave Bank of America and other corporate banks, visit the Move Your Money Project website.