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SWIPER NO SWIPING |
Over the weekend, Bank of America (Bofa) implemented it's widely spoke about $5.00 monthly debit fee for customers that utilize their debit cards at least once a month at retailers across the nation.
FAQ's
Xavier, why is Bank of America charging this fee?
Answer: This is Bank of Ameria's response to Congress's Durbin Interchange Bill passed last year. Over the weekend, Federal Reserve implemented a 24 cent cap on swipe fees from banks (such as Bank of America) to retailers. Before this, banks could charge fees north of 44 cent per swipe to retailers (a negative 20 cent hit to the banks pocketbook per swipe). Other banks such as JPMorgan Chase, Wells Fargo, and SunTrust are subsequently testing out similar fees in selected markets.
Xavier, how does it affect me as a Bank of America customer?
Answer: In selective markets, on a monthly basis you will see a debit card usage fee in the amount of $5.00. This fee isn't reoccurring; one swipe gives them the authorization to hit your account once. On an annual basis, that's $60.00 in fees to the bank on top of the overdraft and other monthly fees that could be charged throughout the year.
Xavier, what can I do to avoid this monthly fee?
Answer: Bank of America is providing waivers to special groups, unfortunately, a lot of customers won't meet the requirements, and hence why these people are considered groups such as a person with $20,000 or more in the account. For those that can't meet Bank of America's special group requirements, I advise the following:
- Super convenient to swipe, but cash always works. Pay with cash instead of swiping the card throughout the month
- Do your homework and find lenders that don't charge fees. That is most likely going to be a local credit union or small community bank. I expect large banks such as Bank of America and others to begin charging the same or similar fee in the near future
- Credit cards are a good payment option if you pay the entire balance off each month, so that you avoid interest charges
- Although not all merchants accept personal checks as payment anymore, many large retailers still will take your check. I know, the people behind you are going to be disgusted of the wait, but they aren't paying your bills either so...
- Paying your bills with a debit card using the bank's online bill payment service does not incur any additional charge.
Bank of America has likely started a trend that will spread across the whole banking industry, be prepared and understand your options. If you have any questions feel free to give me a call or email.
