Debit card fees have customers seeking out credit unions

Posted October 5, 2011
Updated October 6, 2011

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— Dontarius Dawkins is on a tight budget and says it will be even tighter when he has to start paying $5 a month to use his Bank of America debit card.

"Five dollars adds up every month, considering I’m a college student, so I really don’t have $5 a month to pay"” Dawkins said Wednesday.

Bank of America announced late last month that it plans to start charging debit card users a monthly fee starting early next year.

The move comes as new laws cut the fee banks can charge merchants for debit transactions.

Anne Pace, a Bank of America Corp. spokeswoman, said that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won't be charged if they only use their cards at an ATM.

The fee will apply to basic accounts and will be in addition to any existing monthly service fees. For example, one of the bank's basic accounts charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.

A fee for using debit cards is still a novel concept for many consumers and was unheard of before this year, but there are signs it may soon become an industry norm.

SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., plans to start charging a $4 fee next month.

Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.

U.S. Rep. Brad Miller told WFMY News that the fees should be illegal. In response, he has proposed the Freedom and Mobility in Banking Act, which would give customers the right to close an account at any time, even over the phone or the Internet, at no charge.

Due to the fee, Roger Goodwin is considering leaving Bank of America and getting an account with a local credit union.

"They do not have fees, and I also have an account with another bank that is also going to start charging for checking," Goodwin said.

Leigh Brady with the North Carolina State Employees' Credit Union, said the company has seen an increase in new accounts in the last week, which might be a result from Bank of America and others charging new debit fees.

"As a credit union, we are not in the business to make money. We are a not-for-profit cooperative," Brady said. "Credit unions tend to be a better value for consumers … in terms of offering lower fees and better interest rates."

Coastal Federal Credit Union said it has also seen increased interest, and the company plans to lure in frustrated Bank of America customers by rewarding them with a higher interest rate on checking accounts.  


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  • Oldfirehorse - Dr. Disturbeded Oct 6, 2011

    "I was just playing with you on the typo!"

    Not to worry. I hate it when that happens.

    I hope there is a mass exodus from the banks. Every new credit union member just makes it stronger.

  • FE Oct 6, 2011

    "Wells online banking is scary. They hold the money for days before they even pay the bill. Wachovia was doing it right; pay the bill on the Pay Date!" - rosered857

    Agreed on that point!! I'm holding my breath to see if an exit from Wells Fargo is soon to be in order. If I understand it correctly, you need to have the funds in the account five days BEFORE you request WF to make an online bill pay. Let's see: I get paid (direct deposit) on the last day of the month, but if I authorize a bill pay for that very same day I have to put additional money into Wells Fargo FIVE DAYS in advance of that date? R-I-G-H-T !! File that in "California Dreamin'"

    Of course, if you try to contact someone you get a boiler-plate "we're sorry you're having problems with ...." non-answer which normally requires several follow-ups to get your original question even addressed.

    I've heard good things about First Citizens as well as BB&T.

    And OFH - I was just playing with you on the typo!


  • Follow_The_Money27617 Oct 6, 2011

    House, Car, Credit Card, Checking, and Savings all through SECU. Couldnt ask for a better bank or rates!

  • rosered857 Oct 6, 2011

    My 18 year old son and I banked with Wachovia. When I found out that Wells was taking over and completely changing the way online bill pay is done, and were "testing" debit fees in some areas, I was ready to jump ship after many, many years (since they were First Union). Wells online banking is scary. They hold the money for days before they even pay the bill. Wachovia was doing it right; pay the bill on the Pay Date! My son who is a great researcher, checked every local and big bank and came up with a few and we decided on First Citizens, a family run bank for over 100 years; free checking, no debit fees, and they actually know your name when you walk in the bank. Also their bill pay system is just like Wachovia's which is great! There is always another door somewhere that you can open and look in; JUST KEEP LOOKING. Oh and they didn't take any bail out monies!

  • Oldfirehorse - Dr. Disturbeded Oct 6, 2011

    Wow, hush my mouf. I guess I gotta take that last comment back. A 4 minute tunaround; now we're gettin' somewhere!

  • Oldfirehorse - Dr. Disturbeded Oct 6, 2011

    " would think that if you were to "right" a bad check that the credit union would be somewhat appreciative."

    Yeah, I saw that typo after I posted it. I generally would have made a quick correction, but with the moderation delay of 5 to 20 minutes, why bother?

    And, yep, I guess they would.

  • Oldfirehorse - Dr. Disturbeded Oct 6, 2011

    "Just called the SECU here in town and told them that my son has an account with them, but that I do not. I told them I am not a state employee, but was interested in opening an account, if possible. They said all I needed was my driver's license, social security card, and my son's name so they could pull up his account for Elvis has left the building and is on his way to the SECU.. hasta la vista SunTrust!"

    There you go! You will never regret it. Welcome to the SECU family.

  • NeverSurrender Oct 6, 2011

    "In other words, a person can not just chose to be in a credit union without having a direct affiliation with one."

    The reason credit unions were targeted was that the banks wanted a monopoly on financial services and ultimately failed because credit unions often serve those the banks don't find convenient or profitable!

    Coastal managed to find a loophole in the eligibility regs that allows you to join the North Carolina Consumers Council for *FREE* which brings you into the field of membership (the other would be employer or family member).

    Take *THAT*, greedy bankers! :)

  • FE Oct 6, 2011

    "For instance, if you right bad checks, or default on a loan, they will close your account, permanently." - Oldfirehorse would think that if you were to "right" a bad check that the credit union would be somewhat appreciative.

  • skinnyCat Oct 6, 2011

    The fact that not everyone can join a credit union was a big win for the banks when they were calling the shots in DC. The banks will take another swing at the credit unions after the tides of change run back through our elected representatives.