Banks reward you for helping to bail them out.

GostHacked · September 30, 2011

http://money.cnn.com/2011/09/29/pf/bank_of_america_debit_fee/index.htm?hpt=hp_c1

Perhaps the biggest recipient of TARP money, as indicated in the article is now passing the savings on to you, the customer.

NEW YORK (CNNMoney) -- Get ready for a new wave of bank fees. Bank of America will begin charging a $5 monthly fee at the beginning of next year for customers who make debit card purchases.
Whether you use your card for one purchase a month or 20, you will pay $5 per month starting in 2012. It doesn't matter if you select "debit" or "credit" at the point of sale.

If you don't use your card at all, you won't be assessed a fee, and you can still use ATMs as much as you want without getting hit with the new charge. Plus, customers with certain premium accounts will be exempt from the charge.

I suspect other banks will make similar announcements soon enough. I do recall some of you saying that bank fees will start to rise or the banks will devise new fees to stick it to you. I was with all of you who said that.

Just the bank's way of saying 'Thank you for bailing us out!'.

Shady · September 30, 2011

So $60 dollars a year for using your debit card as much as you want? Where do I sign up? I wish I could get that kind of a deal in Canada!

GostHacked · September 30, 2011

So $60 dollars a year for using your debit card as much as you want? Where do I sign up? I wish I could get that kind of a deal in Canada!

Thanks for missing the point shady.

Sir Bandelot · September 30, 2011

So $60 dollars a year for using your debit card as much as you want? Where do I sign up? I wish I could get that kind of a deal in Canada!

What do you mean? Does this new charge replace other, already existing fees?

Bonam · September 30, 2011

Well, I, for one, rarely use my debit card. However, I probably use it a couple times a month when I'm somewhere that happens not to take credit or if the machine is having a hard time with my credit card for some reason. A $5 charge for this kind of usage is completely unacceptable to me. I use Bank of America right now, but will likely move my primary checking account to another bank in advance of this being implemented.

I've always used banks that did not charge any monthly fees or transaction fees for my type of usage, and will continue to seek out such options.

TimG · September 30, 2011

I suspect other banks will make similar announcements soon enough. I do recall some of you saying that bank fees will start to rise or the banks will devise new fees to stick it to you. I was with all of you who said that.

This is a perfect example of how the market always seeks ways to around intrusive government regulations.

Retailers stand to reap billions from the financial-overhaul legislation being finalized by Congress this week, possibly giving them a long-sought victory by slashing the "swipe fees" that credit-card companies charge merchants for every debit-card transaction.

http://online.wsj.com/article/SB10001424052748704256304575321162658897880.html

It should be a warning for people who think limiting credit card interest rates is a good idea.

bush_cheney2004 · September 30, 2011

This is a perfect example of how the market always seeks ways to around intrusive government regulations.

Indeed...be careful what you wish for. As a BAC stockoholder, I am delighted that my guys in North Carolina are trying to make up for the collosal mistake of buying Countrywide.

Shady · September 30, 2011

Thanks for missing the point shady.

It would help if there was one.

So should banks not be allowed to raise fees ever again?

What about banks that have paid back the money given to them under TARP plus interest?

What about banks that received money but didn't need it, but were forced to take it, which was the case for some banks?

What about wanting banks to be less leveraged, and have more cash on hand?

Your childish simplification of a more complex problem is amusing.

GostHacked · September 30, 2011

It would help if there was one.

There was, you missed it.

Bank got a bailout, and now they are passing the savings on to you.

So should banks not be allowed to raise fees ever again?

Depends if they got a bailout or not.

What about banks that have paid back the money given to them under TARP plus interest?

Then they are not in trouble and won't need to raise fees.

What about banks that received money but didn't need it, but were forced to take it, which was the case for some banks?

Then that is an overall problem with the financial system in general and at large.

Your childish simplification of a more complex problem is amusing.

What, no blaming Obama this time?

Shady · September 30, 2011

There was, you missed it.

Bank got a bailout, and now they are passing the savings on to you.

What if they've paid the bailout back? You didn't answer.

Depends if they got a bailout or not.

What if they did? How long do they have to wait to raise any fees?

Then they are not in trouble and won't need to raise fees.

How do you know whether or not a private business needs to raise prices or fees? Do they have to check with you first? What if there are other reasons they may have to raise them? Do they fax a report to you? What if they just want to for the hell of it?

Bonam · September 30, 2011

It would help if there was one.

So should banks not be allowed to raise fees ever again?

What about banks that have paid back the money given to them under TARP plus interest?

What about banks that received money but didn't need it, but were forced to take it, which was the case for some banks?

What about wanting banks to be less leveraged, and have more cash on hand?

Your childish simplification of a more complex problem is amusing.

Banks can do what they want, and people are free to complain about it and/or to stop using them and switch to their competitors.

GostHacked · September 30, 2011

What if they've paid the bailout back? You didn't answer.

I did. Go read the post again.

What if they did? How long do they have to wait to raise any fees?

Who does it benefit when the banks raise your fees? You scratched their back, now they are raping your ass.

How do you know whether or not a private business needs to raise prices or fees? Do they have to check with you first? What if there are other reasons they may have to raise them? Do they fax a report to you? What if they just want to for the hell of it?

Well, since taxpayer money was used to bail them out, then yes they do report to the common man because it's their money used for the bailouts. And now that they paid the money back, they will raise bank fees to make up for that loss.

They had crappy business practices and should have been allowed to fail, instead, taxpayer money was used to bail them out, and money paid back to the lenders with interest, but do the taxpayers get a break because they helped bail out the bank? The answer is no. More fees, less services.

Sir Bandelot · September 30, 2011

Banks can do what they want, and people are free to complain about it and/or to stop using them and switch to their competitors.

Not really. You think the competitors won't jump on this in short time? Of course they will, wherever their is money to be made.

I can't even get paid from my employer, unless I have a bank account. Indeed, it has come to the point that no man may buy or sell, lest he have an account... or the number of an account.

To lead a normal life, we must remain entrenched in the system. One would have a hell of a time trying to step outside of it.

Vagrancy is an option, of course. Vagrancy... the final form of protest

TimG · September 30, 2011

They had crappy business practices and should have been allowed to fail, instead, taxpayer money was used to bail them out, and money paid back to the lenders with interest, but do the taxpayers get a break because they helped bail out the bank? The answer is no. More fees, less services.

Crappy business pratices where they tried to make more money that they should have on mortgages. Now they are trying to make more profit from their banking activities. Why is this a bad thing? Banks that make a lot of money from banking activities don't need bailouts.

GostHacked · September 30, 2011

Crappy business pratices where they tried to make more money that they should have on mortgages. Now they are trying to make more profit from their banking activities. Why is this a bad thing? Banks that make a lot of money from banking activities don't need bailouts.

The bank in question on the OP is Bank of America, which was a recipient of TARP bailout money, and now they are raising fees.

Get it?

TimG · September 30, 2011

The bank in question on the OP is Bank of America, which was a recipient of TARP bailout money, and now they are raising fees.

Yep. And they are trying to increase their profitability of their non-mortgage banking services. This will boost their capital ratios and reduce the risk of a bailout in the future.

I really don't see what the problem is.

Would you be happier if they kept doing what they did in the past and needed another bailout in the future?

Edited September 30, 2011 by TimG

Bonam · September 30, 2011

Not really. You think the competitors won't jump on this in short time? Of course they will, wherever their is money to be made.

I can't even get paid from my employer, unless I have a bank account. Indeed, it has come to the point that no man may buy or sell, lest he have an account... or the number of an account.

To lead a normal life, we must remain entrenched in the system. One would have a hell of a time trying to step outside of it.

Vagrancy is an option, of course. Vagrancy... the final form of protest

There will always be competition. Banks are not a monopoly. The new regulations which have moved the banks to add these fees only apply to banks with more than $10 billion in assets. There are plenty of smaller banks (regional banks, credit unions, etc) that are not affected and will continue to offer no fee accounts and debit cards. If BofA and other major banks want to shoot themselves in the foot by passing costs directly to the customer this way, they are free to do so.

GostHacked · September 30, 2011

Yep. And they are trying to increase their profitability of their non-mortgage banking services. This will boost their capital ratios and reduce the risk of a bailout in the future.

I really don't see what the problem is.

Now ask yourself how many bailouts, Bank of America got over the past few years?

http://www.nytimes.com/2009/01/15/business/15bank.html

Bank of America, which was already granted $25 billion in capital from the Treasury’s Troubled Asset Relief Program in October, is seeking billions more to shore up its balance sheet as it struggles with mounting losses at Merrill Lynch, which it recently acquired, said these people, who were not authorized to speak publicly.

Yes we should reward banks for buying up troubled financial institutions.

Sir Bandelot · September 30, 2011

Well if they want to put up more barriers to consumer spending, here's one way to do it. It will have adverse effects by reducing the amount of money going to businesses, since the $60 comes out of the consumers pocket and straight to the banks. It will also make people even more reluctant to spend money.

TimG · September 30, 2011

Yes we should reward banks for buying up troubled financial institutions.

Buying up institutions and saving the government a bundle because they did not need to settle the counter party claims.

Bonam · September 30, 2011

Well if they want to put up more barriers to consumer spending, here's one way to do it. It will have adverse effects by reducing the amount of money going to businesses, since the $60 comes out of the consumers pocket and straight to the banks. It will also make people even more reluctant to spend money.

Well, a lot of people will just go back to using credit cards instead of debit cards.

Sir Bandelot · September 30, 2011

Well, a lot of people will just go back to using credit cards instead of debit cards.

I didn't read the details but the OP seems to imply it doesn't matter if you select "debit" or "credit". What's with that?

TimG · September 30, 2011

I didn't read the details but the OP seems to imply it doesn't matter if you select "debit" or "credit". What's with that?

The OP makes no sense. Many credit cards have annual fees. Charging $30 for a card is on the low end of fee scales.

Bonam · September 30, 2011

The OP makes no sense. Many credit cards have annual fees. Charging $30 for a card is on the low end of fee scales.

And many have no annual fees. Those that have annual fees usually offer significant rewards programs. Debit cards do not, in general, and the BofA one does not in particular. Examining the available options, it is clearly obvious that $60/year for a debit card is utterly not competitive.