Why B of A really killed the debit card fee
At least 650,000 people have joined credit unions since Bank of America announced its $5 monthly debit card fee, not including last-minute adherents of Bank Transfer Day.
This post comes from Seth Fiegerman at partner site The Street.
When Bank of America announced last week it would nix its proposed $5 monthly debit card fee, the official explanation given was that the company was responding to the "concerns" of its customers, but that may be putting it too lightly.
In reality, it may be due more to the bank's concerns that it wouldn't have nearly as many customers if the fee went into effect.
Post continues below.
At least 650,000 consumers have joined credit unions since Sept. 29, when Bank of America announced it would introduce a debit card fee in the coming months, according to a report released Thursday by the Credit Union National Association, which is based on surveys of 5,000 credit unions nationwide.
While the survey doesn't show which companies the new credit union customers banked with before, the survey did find that four in every five credit unions that experienced a surge in members attributed it to the blowback from fees being considered by big banks such as Bank of America.
At the same time, it's worth noting that this survey doesn't factor in the number of consumers making a last-minute switch as part of Bank Transfer Day, the massive social media-driven movement that was urging consumers to close their accounts with the big banks before Saturday.
While the full effect of Bank Transfer Day won't be known for days or even weeks, media reports from across the country showed thousands were out over the weekend to make their point to the big banks. Even The Wall Street Journal, which snarked that "people who gravitate to credit unions tend to be unprofitable for giant banks because of the small balances they keep on deposit," acknowledged the numbers involved -- anecdotally:
"On Saturday, the Boeing Employees' Credit Union in Seattle signed up a one-day record 659 new members. At the grand opening of a Randolph-Brooks Federal Credit Union branch in Pflugerville, Texas, the parking lot was so full that customers had to leave their cars across the street."
The Journal's headline? "Credit unions poach clients."
After years of being able to increase fees with little fear that customers would jump ship, the big banks finally had a reason to cave to consumer demands, perhaps most of all for Bank of America.
One survey released last week before Bank of America killed off its debit card fee found that only 40% of the bank's customers planned to keep it as their primary bank going forward. The survey also found that just over a quarter of Bank of America's customers were satisfied with the bank overall. The findings were the lowest by far of any major bank.
Given this reality, going through with the $5 fee could easily have been the final straw for many customers.
More on The Street and MSN Money:
To all of you who have not yet experienced the uncomfortable shaft by BOA: Hold still, your next after we're gone. The 29.99% CC interest rate hike imposed on me had nothing to do with any derogatory action on my part but solely BOA squeezing blood from the turnips that still had resources. In case you don't know, BOA dropped the $5 monthly fee in favor of a $25 monthly fee for those customers with less than $5k in their account(s) month to month. My elderly father received his notice by mail a week ago. So hold still, grab your ankles cause you who are left are next. As a matter of fact, I'll hold their cloak during the process.
Some damage was done to their already bloodthirsty reputation, though.
Ageconomist says that Interest Rates are based on credit scores and payment history.
Hmm. Bank of UNAMerica approved my home loan with my wife, with our measly credit scores of 690 and 720. Yet, 6 months prior, they jacked up our credit card interest to 29.99% because of "new regulations."
First National Bank, after 5 years of FLAWLESS credit history with them, jacked my rate from 6.99 fixed to 19.99% variable. Somehow, my FLAWLESS credit history was a huge risk.
American Express jacked up my Business Card from 7.99 fixed to 13.29% variable. 10 years and I think ONCE in 10 years, I had one payment that was two days late.
Yup, it is ALL about credit scores and payment history. Those worthless peons who can't manage their finances are the ones to blame. Lets all vote republican and take away their entitlements, so that they will have even LESS to survive on and give it all to the top 1% so they can create jobs overseas.
Sheesh, stop watching Republicon news for a change. It is CORPORATE GREED why they jack up the rates. It is CORPORATE GREED that causes Bank of UnAmerica to pay out 4.4 BILLION DOLLARS in bonuses to their FAT-LADEN GREED FILLED PIGS while laying off 30,000 employees.
Incidentally, I left Bank of UNAmerica (everything except my home loan). I stopped using my American Express and First National got the message when I Stopped using my card for almost a year. Suddenly, my rate went BACK down to 7.99%. Didn't matter. They jacked my life up, I won't use them anymore.
If taking your money out of BoA is fun, consider taking your 401k out of Wall Street.
You'll be happy, but think of the joy you'll spread in Goldman Sachs.
I am supposedly an unprofitable client, since I continuously search for the lowest financial impact to store and borrow money. Yet, when BofA kicked me to the curb (they changed their minds 3X on the loan-to-value of my mortgage refinance) I took my mortgage and all other accounts to US Bank - one of the larger regional banks that didn't need a bailout 3 years ago. So, since mortgage holders pay 3X their original loan amount over 30 years, BofA closed off a significant profit. Poor decisions have ruled the organization since they merged with Countrywide & now they surely rue that move!
Everyone should stop using corporate banks and corporate businesses. You want America back? Take out the corporate giants. That's who's responsible for the election turnouts. Your vote don't mean crap.
Reb34 the fee was not associated with any deliquincy in the account, it was a debit card monthly fee to get your own money from your account.
Make sure you are informed before making a comment.
The Bank of America was formed in the latter part of the 1920s as the result of a merger between the Bank of Italy (based in San Francisco) and the Bank of America, whose business interests were solely based at that time in Los Angeles. The merger resulted in a rebranding of the expanded Bank of America company leading to the merged bank being called BankAmerica. BankAmerica was headed by Amadeo Giannini (founder of the Bank of Italy) and co-chaired by E. Monette (founder of the Bank of America).
The Bank of italy was established to serve working class citizens of the area, especially Italians living in San Francisco’s North Beach neighborhood. The bank survived the san Fransisco earthquake of 1906 and was one of the first to offer loans to businesses to help rebuild the city.
In fact, the card fee was being considered by other banks as well. But clearly they backed down, leaving bofa hi and dry on this. So bofa really didn't have any choice but to back down, like the other banks / team / co-conspirators.
BofA has always been the most expensive bank to deal with. Now that Wells Fargo is into the bigtime banking it is my opinion that if you want to SAVE money go with a small community bank or a Credit Union.
The Big Boys don't get fat eating crumbs. If you have to watch your money closely the Big Banks will have to learn from the discount brokers. People are interested in saving money. Big Banks Do Not deliver.
One other thing---If you are looking for intelligent life, look to the Bankers LAST. These guys are as worthless as Teets on a Boar Hog!
this whole got out of control: situation should be a mistake we can learn from and more on in the right way mistake were happening banks lend wrong and people excepted the loan. but bank arn't the only business that was misleading. we have to get more realalistic, actually we should our american ways start things that are new. what we try and achivce from this we should only
be truthful about. for only God came to do good that should only what we should do.
Always been B of A customer, always will. No reason for me to switch. I have no fees because I know how to manage my money and keep minimum balances, never bounce a check, etc.
I'm sorry to those of you that have fees, but you're obviously violating some term of the contract you signed up for because I have never had a fee (had one, but they removed it with a simple phone call).
At least by you switching you realize that you need to manage your money more diligently. You can at least thank B of A for that.
Copyright © 2014 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
A new survey by MoneyRates.com gives a glimpse into what a little financial education can do.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'