Bank of America adds monthly fee

Starting next year, the $5 charge will hit most customers who buy things with debit cards.

By Kim Peterson Sep 29, 2011 1:30PM
Bank of America (BAC), drowning in financial problems, plans to add a $5 monthly fee for customers who make debit card purchases.

The Dow Jones news service uncovered the plans after seeing an internal memo sent to bank executives Thursday. It's safe to say that customers will be outraged if the new charges start early next year as planned.

The fee will kick in only during the months when customers use their debit cards to make a purchase, Dow Jones reports. If you use your debit card only at an ATM, you won't get charged.

Check out the following video about hedge funds starting to invest in Bank of America at super-low prices.

Post continues below.
The bank is in bad shape. Its stock has been hammered, it's getting sued left and right, and its credit rating was cut recently. Desperate to shore up cash, it plans to lay off 30,000 workers. B of A shares rose nearly 3% to $6.34 on the news Thursday.

"The economics of offering a debit card have changed," a bank spokeswoman told Reuters.

Perhaps the bank could raise the fees for merchants who accept debit cards? Nope. The Federal Reserve Board said that, starting Oct. 1, the maximum fees merchants will pay is 24 cents per debit transaction. The current average is 44 cents, based on the $38 average debit purchase.

Those new limits will cut Bank of America's annual revenue by $2 billion. So the bank is looking to recoup that money on the customer end of the transaction. It's too bad, because debit cards have become a convenient replacement for checks at stores and restaurants.

Will customers stand for this? I'm going to start using my no-annual-fee credit card more, which gives me points as well. And there's always plain old cash. Customers with certain premium accounts won't get hit with the fee.

And you can be sure that if Bank of America does this, other banks are sure to follow. Most banks are going to feel the pain of the new Federal Reserve transaction limits. Wells Fargo (WFC) will start testing a $3 fee in several states. And JPMorgan Chase (JPM) has begun a similar test in Wisconsin.

312Comments
Sep 29, 2011 1:42PM
avatar
Time to dump these gambling addicts who think it is ok to fleece banking customers like a 1920's carny side show.

Take your money OUT of BoA, move it to a local Credit union or small bank, and let the elite of BoA die off.

Same will Wells Fargo....send a message to these elitists that stealing even more money from hard working Americans to cover their bad gambling debts that it is not ok. 
Sep 29, 2011 1:48PM
avatar

I've put up with BofA fees for far too many years as it is, I am changing to a credit union this month as soon as my home loan closes and I dont have to worry about where all my money is for reporting purposes.

 

Feels like highway robbery to charge me to access my own money, when banks accrue interest gained on the savings I keep as a monthly balance.

 

BofA: you never gain fans in your customers by nickle and diming us to death. Thanks for the 15 year run as a customer, but unfortunately I am going to a local credit union.

Sep 29, 2011 2:41PM
avatar
Maybe if they stopped giving huge bonuses to their incompetent executives, they wouldn't be in such bad shape.
Sep 29, 2011 2:02PM
avatar
Time to leave the big banks for smaller local banks.
Sep 29, 2011 4:30PM
avatar
B of A should be ashamed of themselves. The government gave them huge money (taxpayers money), as they did the carmakers. Hey, I'm in financial difficulty, will anyone help me and send me some money???? I doubt it.  If every B of A customer closes their account, I think that would be appropriate response to their threat of taking even more of your money for no good reason. They have shady business practices, they don't care about their customers and they ought to be driven out of the banking industry .
Sep 29, 2011 2:48PM
avatar
Bank of America is the worse bank ever. I rather bank under my mattress before I give any money to BOA!!!!!!!!!Baring teeth
Sep 29, 2011 1:52PM
avatar
I pulled out of B of A a couple off years ago after having been with them for years. My B of A bank got a new manager and she treated me like crap one day. I switched banks the next day, and could not be more happy with my current bank. B of A has always preferred commercial accounts over private accounts. This is just another example of how much they care about their account holders. Everyone with a private account should just find a new bank and let B of A fail.
Sep 29, 2011 2:10PM
avatar

Time to start a grass roots effort to not only help the economy but also show BIG BANKs that consumers do have some clout!!! 

Take your money out of the big banks, deposit it in small community banks or credit unions which are more likely to make loans to small businesses who then can hire more employees and perhaps help get our economy back on track.

Sep 29, 2011 3:02PM
avatar

Bank of UNAmerica paid 4.4 BILLION dollars in bonuses last year to its top executives.  Now, they have to lay off 30,000 employees?  Why don't they just take the money back from the fat PIGS who didn't deserve it.   4.4 BILLION dollars for ruining a company.

 

Leave them. THEY ARE CROOKS FULL OF FRAUD.   Here is what they did to ME when I closed my accounts.  I go to the branch to close my accounts.  I had everything consolidated into my checking account.  She pulls it up on the screen and says, "OK, I see the consolidation.  Oh, there is some interest that is due to be paid on your account (couple of PENNIES) that I will add in.  I will be right back with your check."

 

I get my check and leave.  2 weeks later, I get my monthly statement showing that a $25.00 OVERDRAFT CHARGE had been applied against my line of credit the same NIGHT that I closed my account.  The brach rep OVERDREW MY ACCOUNT BY ONE PENNY.  The "cents" amount of the check should have been .07 and she wrote the check for .08.  This means:

 

SHE wrote down .08 instead of .07 on the withdrawl slip and CHECKED IT.

She then gave it to the TELLER who ALLOWED the FRAUD to happen when SHE double checked it and created the check.

The MANAGER then verifed and APPROVED it by SIGNING the check and gave it to me.

 

THREE PEOPLE clearly saw that the amount was wrong and allowed it to happen.  The $25.00 was posted to my BOA Credit account as a "cash advance" which means the 29.99% interest rate starts IMMEDIATELY from posting, PLUS the overdraft FEE that was charged to my account.

 

I REFUSE to accept this as a "mistake" as THREE DIFFERENT PEOPLE looked at the withdrawl slip, looked at the account on the computer screen and verified it.

 

Bank of CROOKS.  Bank of THIEVES.  LET THEM FAIL.

Sep 29, 2011 2:29PM
avatar

If B of A is hurting now , just wait till the debit card fee goes into effect. They are losing money so the only way they can figure to minimize the loss is to gouge their customers with a fee ??  Without customers the bank will FAIL!!!  Guess they didn't factor that into their "business plan" 

Time to start looking for another bank.  

Sep 29, 2011 2:13PM
avatar
I was in on a little campaign many years ago to encourage customers to take ATM cards when many of them were scared of doing so.  We telephoned people and told them of the many benefits and how they were completely free.  Now that banks have pared down their branches and service people because so many people are banking on-line and using ATMs and debit cards, they think they can get an extra fee out of people.  I suggest you all close your accounts immediately.  Bank of America is rotten to the core.  They are high on my list of worst banks in the world. 
Sep 29, 2011 2:18PM
avatar

B of A pushed the debit card business at first.  Now they want to charge us!?  Time to shop around and find another bank.

 

Sep 29, 2011 2:27PM
avatar
I have been a customer of bank of america since 1985.  I use Direct deposit. I have bought a home and paid it off through bank of america. Let me be very emphatic about this. You charge merchants to take debit cards already. If you change your policy and I receive ONE  charge for using my debit card I will no longer bank with B of A. because this will put you in the catagory of a con artist and thief.
Sep 29, 2011 2:48PM
avatar
BoA should have died, it shouldn't have been bailed out.  The foolish investors should have lost their money, that's capitalism.

Use cash or go to a nonprofit Credit Union.   If you are a true capitalist you should reward institutions that are responsible, and punish irresponsible ones.

No more Bush or Obama bucks for BoA

Sep 29, 2011 2:30PM
avatar

Wow.  We use banks for money storage, they turn around and lend it out charging interest, then charge us fees for doing so.

 

Im to the point of grabbing a coffee can.

Sep 29, 2011 3:54PM
avatar
I am definately going to cancel my BOA account. ASAP
Sep 29, 2011 3:50PM
avatar
My suggestion is to get rid of all the plastic and get back to CASH and carry a 45.
Sep 29, 2011 3:46PM
avatar

this is the final straw...i will be closing all my accounts with BOA!  Enough is enough....they keep taking from the little guy to pay the big bonuses and wages to the top of their food chain, who are ulitmately responsible for their debt in the first place.  They get rewarded for bad business practices that they should have been fired for, and keep taking from those of us who can't afford to live as it is. 

 

They led us down this path of using our debit cards exclusively, instead of cash and instead of checks, and now they want to charge us for that...I for one am done.

Sep 29, 2011 2:36PM
avatar
Seriously, BoA?  That's only going to drive account holders away, which will counteract your reason for imposing these fees in the first place.  Way to go, geniuses.  Enough is enough.   The banks already make money by charging the merchant fees, they make money by lending our money off and collecting the interest on it, and now they want to charge us money for spending our own money.  I've already opened an account at a local credit union.  You can rest assured that if my regular bank follows suit, I will cease doing business with them and bank solely with the credit union. 
Sep 29, 2011 3:18PM
avatar

I am APPALLED at the new $5 fee that will go into effect for all debit card transactions for all of your customers. I mean, seriously, are you all ****ing idiots at your company? I am a hard working 24 year old making $30,000 a year at a company that I am lucky to be employed at especially in this economy. It sickens me that you expect me to pay $5 EVERY MONTH FOR 12 MONTHS A YEAR totalling $60 that I could better use somewhere else like say my cell phone bill or the numerous student loans I incurred from putting myself through college to have a better life. Take this bank and shove it up your asses because I am definitely considering and probably will move to another bank, one free of taking my hard earned money to use for “your losses”. Tell that to the 30,000 people you laid off, I’m sure they feel great about knowing they were fired to “save your company money” and to also charge us $5 every damn month. And if you think that you won’t lose customers over this, guess again. If you check your latest story on the MSN home page and all the comments listed below it you will find other customers who are just as angry as I am and are already moving to another bank. Way to go Bank of America, I hope you’re set for losing a bunch of customers so tell your customer service agents not to be too surprised when people call in to close their accounts. I hope they can hide the shock and surprise from me over the phone because they should not be and if they ask me the reason why, I’m going to tell them the truth about you ****ing blood suckers and encourage them to go to a different company who do not take pride in firing people and charging their customers money even though they probably have millions of dollars probably stashed in secret accounts in Switzerland.  In my family alone I have six people and five are through Bank of America. You can kiss those five accounts goodbye.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

113
113 rated 1
279
279 rated 2
416
416 rated 3
647
647 rated 4
548
548 rated 5
513
513 rated 6
669
669 rated 7
516
516 rated 8
317
317 rated 9
113
113 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
KOGKODIAK OIL & GAS Corp10
UPLULTRA PETROLEUM Corp10
TAT&T Inc9
COPCONOCOPHILLIPS9
DVNDEVON ENERGY CORPORATION9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.