Teaching Tip: There’s an excellent All Things Considered podcast from NPR titled “BofA Cancels Plans for Debit Card Fee” that you can assign before class.
After the other banks didn’t join in and in response to consumer outrage and threats to take their business elsewhere, the Bank of America has backed down on its planned $5 debit card fee.
In an earlier blog entry we examined this debit card fee right after it was announced. Unfortunately, the banks may try to recapture this lost revenue in other forms. It’s like whack-a-mole, if they can’t raise the money with a debit card fee, they’ll most likely find another way to raise the money – perhaps lowering what they pay on deposits, raising the minimum checking account balance, or eliminating free checking accounts. What all this means is that you’ll have to watch closely to make sure your fees don’t go up, and if they do, you’ll have to make a decision whether or not to stay with your bank. Possible ways banks could make up the lost revenue include:
- Late fees
- Credit card interest rate increases
- Lower deposit rates
- Charges for paper statements
- Credit unions are an alternative to big banks. Read the article, “Fed-up Bank Patrons Flee to Credit Unions” from the Detroit News and the article “NAFCU: Want to Avoid Bank Fees? Join a Credit Union” from Business Wire – why are credit unions a good alternative to banks?
- Do you regularly check your banks statements – carefully looking at the deposits, credits and debits? Maybe you should start.