In high school, I became a loyal Citibank customer. My parents were members of Cal Fed, which was bought by Citigroup in 2002. So I guess you could say I was born into Citibank. But when they started imposing fees on me because I was poor and couldn’t keep my balance above the $1,500 minimum, I split from the company shortly after returning from Cairo.
It took me a while to decide on my next bank (I’m very picky and very loyal). I finally decided to go with Bank of America for two main reasons. 1, because its website was by far the best among banks (American Express has the best websites among financial institutions though… and that’s why I am also a proud AMEX card holder!) and 2, because it had a free checking account (assuming you made one withdrawal and one deposit at the ATM).
How can poor people resist that second reason? After all, Bank of America is still the only major bank that has a free checking account (with the least number of things to do to make it free — other banks make you do direct deposit are have it linked with a parent’s bank account in order to make it free… but going with other options create much bigger hassles.)
Even though I feel Bank of America is the best bank option out there, the money giant has been taking in some heat as of late. As I write this, its site is still “Temporarily Unavailable.” It’s been down the last few days, suspiciously after announcing it will add a $5 monthly fee in 2012 to debit card holders if they use their card to purchase anything that month. NPR reported that a spokewoman for the bank denies that the website outage had anything to do with the site being hacked, but it would make sense! People seemed to be really annoyed by the $5 charge announcement!
But I feel these people are making a way bigger deal than they need to about this $5 charge. After all, B of A isn’t the first bank to announce creating this kind of a fee (the only reason people are noticing this B of A announcement is because it’s the largest bank in the nation). Just a few months ago, Wells Fargo announced it would be charging a $3 fee to debit card customers in Georgia, New Mexico, Nevada, Oregon and Washington starting October 14. Chase also announced a similar charge earlier in the year, and is even entertaining the idea of creating a cap on the amount one can spend using a debit card (between $50 and $100).
The reason banks are talking about imposing these charges now is because a Federal Reserve mandate goes into effect today that reduces the maximum fee banks can charge retailers per debit card transaction, down to 24 cents from 44 cents. That means banks will lose 20 cents per debit card transaction. So naturally, they’re trying to make up for it in other ways, by imposing a flat fee for those who use their debit cards to buy things.
But let’s be honest, who actually uses their debit card for purchases in the first place? I learned early on not to use mine to buy things after realizing that retailers often like to pass on that 44 cent charge to its customers. I always buy something using a credit card and pay it off before the bill cycle ends. If everyone did that, they wouldn’t have to pay $3 – $5 a month, and could get points from their credit card company!
There are a lot of people whining, “We will not pay $60 a year to use our own money!” But shut up. You’re not using your own money by using a debit card. You’re using electronic money that Bank of America or Wells Fargo is providing you. If you want to use your own money, go to an ATM and get withdraw cash for free. Idiots.
And there’s no point in changing banks because of this fee either. All banks will do this eventually. Banks are businesses and businesses need to make money. So quit whining and move on. Be happy banks store your money so you don’t have to store it in shoeboxes in your closet. And be happy B of A has the best website in all the land… even though it’s still “Unavailable.” see u.