Bank of America to charge $5/month for debit card swipes

Bringing up taxpayers in this thread is pointless. Just as Blazer Prophet bring up the bailout. Neither one of those things has anything to do with the new banking fees.

 

You're not talking about a checking account. People need checking accounts to run their households. Checking accounts exist because they are a necessity. A time deposit is more what you are referring to. Say I open one up for 24 months for $100,000.00, the bank then can lend that money out for 24 months and at the end of that term they pay me 1.5% in interest. But on a checking account, when my $1,800 is deposited every two weeks, and my house payment is $1,400 a month and the majority of the rest goes to paying other bills or Blazer tickets the bank loses money on maintaining that account.

 

They offer checking accounts in the hopes they will be able to build a relationship with you as a customer. Offer you a credit card, auto loan, or a mortgage. It used to be the fees they could charge for merchant processing and a overdrafts covered the costs of maintaining a checking account relationship with the bank, but just a checking account relationship is not profitable for the bank.

I was on a conference call last week with the head of our U.S. division and he said the bank was introducing more fees in the coming months because (1) the initial fee structure that was introduced didn't cover the costs and (2) they "retained much more customers than expected." I heard that second part as "we didn't lose as many as we had hoped."

 

And, conversely, will lose me as a customer if they decide to charge me to swipe their debit card.

 

And you should leave. I don't have any accounts with the bank I work for. I still have all my accounts with U.S. Bank because they don't charge me any fees. But don't kid yourself into thinking that them "losing you as a customer" affects them. They want to lose the customers they can not make a profit on.

 

I pay no bank fees and make money on my credit card.

The way it should be.

 

It used to be, if banks needed to increase their profit from depositors, they increased the interest rate they charged borrowers. Simple.

This concept went out the window when banker's hours ended. When tellers had to greet customers outside of 10 am to 3 pm, they just cracked and freaked out. They forgot how to keep it simple. Just increase interest rates to borrowers. Then they started being open till 6 or 7 pm. The nation's financial system collapsed.

It's quite obvious how to save this country, but no one listens.

 

The Fed sets the interest rate, which have been historically low for three years now. That's just another thing that is now less profitable for banks.

$250,000 at 4% for 30 years makes $179,673.71 in interest for the bank.
$250,000 at 8% for 30 years makes $410,388.12 in interest for the bank.

 

In some cases, you get double-dinged. In other words, a service fee from your banking institution, along with an additional service fee from whomever owns the ATM machine.

In your example, you could get charged $4 (or more) on that same $20 withdrawal.

PS: Sometimes, I found myself dropping by a grocery store and buying something small (such as a pack of gum), then getting cash back as to avoid these types of charges/fees.

 

When I first started in retail banking I worked in a branch that was inside a Safeway. I always recommended buying a pack of gum and getting cash back instead of using the banks ATM. There are a lot of banks out there that will refund your ATM charge if you bring in you receipt for the withdrawal (like Schwab the Denny mentioned above).

 

They can charge what they want. The market will decide if this fee sticks.

 

The reason this fee now exists is because of Congress interfering with the free market:

http://www.nationalreview.com/articles/278888/durbin-fee-editors

It hurts credit unions and small banks as well.

 

I take it you don't use a credit card, either.