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:
Banks once were great at giving GOOD FINANCIAL ADVICE. I know because I was a banker for 36 years. Since the repeal of the Glass-Steagall Act the main focus by banks is to strip clients out of every fee possible and sell every product even it was not good for the client. I know because I refused to operate this way or sell my INTEGRITY!
These practices are now coming back to haunt banks from those who are now more financially astute. For all other (DUMB MASSES) the banks will continue to hose them for every penny they can squeeze from them.
The last 5 years I was in banking, you did not dare get caught trying to give sound advice not to do a financial transaction. The bean counters would not look good then. It is now all about products sold to each client regardless of need or good advice.
It is sad that most people are very uninformed when it comes to financial matters. The same people know everything about "Dancing With The Stars", "The Bachelor", "The Jersey Girls" or other EMPTY information shows. These people will continue to be taken advantage off.
I can't get over the misunderstanding about credit unions. They have essentially the same services as the big banks. They subscribe to a nationwide system of ATMs (the ATM Cooperative). You can bank online, check balances, transfer funds, etc., etc. I have govt. payments sent to my credit union via direct deposit. I don't pay any ATM fee if I use the ATM Cooperative (either at my multi branch credit union or other credit unions). I have my business checking account at my credit union along with my personal account. Why anyone would willingly pay the outrageous fees charged by banks is beyond me. Get real people, use a credit union and save yourself money and grief.
The fact that they stopped the $5 fee is meaningless. My husband just received a letter from B of A telling him that unless he had a very high balance (something like $20K), he will be charged $25/month for the privilege of banking with B of A. Why isn't anyone talking about this?
Every one need to switch from CITI, BofA and Chase to your local credit Union, Take back your money before its all gone in fee’s and interest!
After taking the bailouts, these big banks should be thanking American taxpayers, not looking for additional ways to fleece us. Now Freddy Mac wants another 6 billion, which will possibly creep upwards of 142 billion before they are done asking for more handouts.
Let's get back to basics: Open a business, any business, and you alone are responsible for it if it fails. The same should go for big banks. NO MORE BAILOUTS. FOR ANYONE. PERIOD.
I truly cannot understand why those big fat bonuses that were paid just before, during or just after the failures were not taken back. Only the dumbest among us would pay millions of dollars to someone who so obviously failed to do their job. None of this makes any sense (the common sort) to anyone who can add. Government simply must get up out of bed with these crooks. There need to be limits on how much a particular person or business entity can contribute to a specific candidate. Our tax system is stupid too. If you make more money than me, you should pay more taxes than I do. Unfortunately, they have been doing it backward way too long.
BofA is not out of the woods yet with me. I may pull my accounts from them by the New Year. I'm so sick of these big banks that beat down the people busting their butts making a living, and trying to live a good life.
Why not just look at Citi Bank. They were going to charge me $15.00 if I didn't keep an outrageous balance. I got an EZ account and now I don't have to pay it. If people don't look at their snail or email, they will have a $15.00 fee this month. I don't see anyone going after them.
Wells Fargo was going to charge me $8.00 this month for the same reason.
I have had each account forever and no fees. This month was going to start the fees.
We need to stand up and just close our accounts and go to Credit Unions.
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!
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