Are you angry that banks are now charging you to use your own money?

When Bank of America announced their (bad/dumb/stupid/greedy) decision to start charging me and millions of other people for using our debit cards to access our own cash that they make a fortune using and lending out, I was pretty well ticked off. As an MBA and a business owner, I understand the regulatory environment changed because of a short-sighted Congress who wouldn’t know their belly-button from a hole in the ground (this is a family blog) and I do understand the revenue shortfalls this too-big-to-fail bank will experience. But dang it, that’s MY money and we’ve been conditioned for the last 20 years to use our debit cards instead of credit cards ^[2] and now the game changes in mid-stream.

PerkStreet doesn’t ZING you for using your debit card, they REWARD you instead! Sign up HERE! ^[3]

When you or I use a credit card ^[2] to make a purchase of say, $100, the merchant only receives about $97. The remaining $3 is used for processing the card — a portion goes to American Express ^[4], MasterCard, Visa, or Discover ^[5], a portion goes to the card processor, and a portion goes to the bank who handled the money. When you or I use our debit card, typically there isn’t as much going on — essentially this becomes a simple online transfer of funds from your checking account ^[3] to the merchant’s, handled by a card processor. What recently happened was that Congress placed a limit on the amount that processors and banks could zing merchants … now just 21 cents per transaction. Swipe your debit card to buy a $4 latte and the processor gets 21 cents … swipe it to buy a $1,000 LED television and the processor also gets 21 cents. Processors aren’t happy and neither are the banks, so the banks are responding by charging an additional fee for debit card use to make up for their lost fees. Guess who pays?

I’m not going to stand for it.

How YOU can avoid the new debit card fees

1. Best Advice – Switch Banks In 6 Easy Steps ^[6] to a bank that understands that IT’S YOUR MONEY.
2. Good Advice — Use cash as much as possible. You shouldn’t be charged for taking cash from your own bank’s ATM, but I wouldn’t be surprised if that changed at some point as well.
3. Good Advice — Go back to using checks. Sure they’re a pain to have to write out, but it beats paying extortion money for using your own funds that are sitting in that big old bank building on the corner.
4. Be Careful Advice — Use a charge card like American Express ^[4] where you have to pay it off each month or a credit card ^[2] like Discover ^[5]. Make certain you pay these off each month and don’t carry a balance! One quick way is to set up online access between your bank account ^[7] and the credit card ^[2] and transfer the cash each evening to pay that card THAT DAY.

In the event you don’t want to change banks, stop using their debit card and go back to old fashioned checks or credit cards ^[2] (diligently paying them off each month), but be certain to open an account at Ally Bank ^[8] or at PerkStreet ^[3]. Neither of these banks will charge you to use your own money and after speaking with representatives from both of them this past weekend, I can tell you they were astonished that Bank of America (and several other banks including Regions, Citi, Chase, and Wells Fargo) made such a move.

Banks are predicted to lose up to $6 billion in revenues because of this change in fees. Perhaps they shouldn’t have built all those fancy offices and should focus more on providing great customer service like Ally Bank ^[8] and PerkStreet ^[3].

Technorati Tags: banking ^[9], bank of america ^[10], card processor ^[11]

About the author

Ron has written 1082 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal ^[12] in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

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