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Bank of America Cancels Debit Fee, I’m Still Leaving

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Bank of America ATMsBank of America has backed out of its plan to charge a $5 per month debit card fee to its customers. It follows several other banks who have announced new fees only to back off them a short time later.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer at Bank of America, said in a statement. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

For many customers like me, it’s too late. I’m leaving. I started the process to change my bank a month ago and I’m not stopping – here’s why:

Momentum

I’ve already started adjusting my financial network map to put Ally Bank at its center. All my Bill Pays have been moved over, direct deposits have been changed, credit card payments have been updated, and the only things left are infrequently used things like Treasury Direct account links and how we pay our county water bill.

The hard work of moving accounts has been done and was prompted by a “measly” $5 debit fee. There’s no reason to stop now and certainly no reason to revert back. What will seem kind of funny is that the reasons for doing this aren’t themselves enough to push me to move. It’s the annoyance of a $5 fee that pushed me to move and once I started, I’m not stopping.

Interest Rates

Any online bank will give you a better interest rate on checking, I simply chose Ally Bank because it, at the time, had the higher rates based on a brief look around. Right now, you can get a little under 1% at an online bank for a checking account. A Bank of America, I was getting a big fat zero. It’s not a ton of money, which is why I wouldn’t have switched banks sans the fee, but it’s better to make money than pay it.

As for picking Ally – I could’ve opened a checking account at ING Direct or a dozen other banks between similar rates, a favorable CD termination penalty, and online chat functionality; Ally won out.

ATM Access

I opened a Bank of America account because they have branches and ATMs everywhere. Here’s the ironic part about all this, since many online checking accounts offer ATM reimbursement, they have networks even bigger than Bank of America. Ally will reimbursement all ATM fees. That means every ATM is an Ally Bank ATM. When I opened the account nearly a decade ago, online checking wasn’t readily available and the ones that were available certainly didn’t reimburse all ATM access.

Depositing Paper Checks

Finally, with a brick and mortar bank like Bank of America, you have to deposit checks at the branch or a BoA ATM. With Ally, I can scan the check and upload it. If I don’t have a scanner or if the check doesn’t scan right or if I’m simply too lazy, I pop it into an envelope and mail it to them. I do run the risk of the check being lost in the mail, I’ve done it a few times and it hasn’t happened so I’m happy to keep taking that risk (plus I don’t get that many paper checks).

So as you can see, all of the reasons to switch aren’t enough on their own, it wasn’t until I heard about the potential debit card fee that I realized a sea change was coming. Today it’s the debit fee, tomorrow it’ll be something else. They will have to find a new revenue source and most of those come out of our pockets.

(Photo: beglendc)

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22 Responses to “Bank of America Cancels Debit Fee, I’m Still Leaving”

  1. Shirley says:

    The debit card fee was ‘the straw that broke the camel’s back’ for a great many people. Their united feedback was loud and clear and weighted with immediate action. Hopefully that will serve as an example for a long while. ;-)

    • Scott says:

      $14 fee if you DONT USE your debit card in a month. FUCK BANK OF AMERICA. It costs money to have your money in the bank now days? HUH????

  2. Scott says:

    BAC stock – sell, sell, sell!

  3. partee875 says:

    I too am fed up and already started the process of switching banks. I have a great local bank that is open 7 days a week, until 7pm, and reimburses all ATM fees. The people there are also super nice. It’s a win/win. I have an online checking account that also reimburses ATM fees.

    Like you Jim, I chose to open a BOA account because they had ATMs everywhere. That’s obsolete now. I don’t even use a debit card, but the principle of charging me for it was too much. I’m keeping the account open for now, but only with $100 bucks in it. I’m not sure why, so I’ll probably close it eventually.

    • Jim says:

      The way I see it, they will find something to charge. It was the debit card today, it’ll be some other fee tomorrow.

      I’m keeping ours open with some cash in it just so I can be sure we got every last link switched.

    • Scott says:

      How about the idea that they already charge $14 for a month to which you dont use your debit card!!! So, $14 if you dont use it, or $5 for every time you use it? Who is running this show? I will be dammed if I am going to pay to keep my money in the bank. It would be cheaper to buy a 10 ton safe…

  4. Adam says:

    I was using Regions. They, like BofA, started charging $4/month for using their debit card and requiring minimum balance requirements. So I switched to a local credit union.

    • Shirley says:

      NO B&M banks for me. I got out of those a long time ago. I find that a local credit union with no fees for a checking account, and $1,000 savings account for immediate access, to be best for us. That checking account is linked to our ING Direct savings so online transfers are quick and easy. The B&M credit union is handy for deposits, cashiers checks, or for most anything where a B&M bank would be needed. This seems to be the best of both worlds.

  5. Jacob says:

    Brick and mortar banks do come in handy when you need a cashiers check.

    • Jim says:

      That’s true, couldn’t you just bring in cash and get one that way?

      • Jacob says:

        Maybe, but that’s not practical for large purchases, like for homes or automobiles. I’m looking to buy a used car right now, and I’ve had to transfer a big chunk of money from my online accounts to BOA so that I’ll be able to grab a good deal if one comes up. It’s probably not a good idea to tell a seller: ” I would like to buy your car. Just wait a week so that I can have a chance to get cash out of my online accounts.

      • Roberts says:

        Not true at some big banks. How will you get a cashiers check for down payment for mortgage, or for a car? Or cash for that matter? Big banks and others may not give you cash with an Ally check unless you had an account with them. ATM limit is $500; add an ATM fee surcharge, and you can only take out $480?

  6. ziglet19 says:

    We were actually in the process of dumping BofA WHEN they announced the fee change, so it just made it easier. We’re very happy to be rid of them and so far only having good experiences with our new credit union.

  7. Anonymous says:

    I don’t understand why the banks can’t just accept that times are changing and take the losses now (close down branches, etc.) While developing a better strategy, instead of dragging it out with these ridiculous fees while holding onto the high-overhead model.

  8. Scott says:

    Before you get too excited about Ally Bank, you should take a look at its history on Wikipedia. Formerly GMAC, it is still into TARP in a big way. Banking isn’t magic and Ally doesn’t have a special potion. In order to pay back the TARP money, promise great deal, draw in customers and then start squeezing them. You might want to keep that momentum handy.

  9. Sun says:

    Really ally bank? Formerly gmac… They still haven’t completely paid back the tarp funds.

  10. bloodbath says:

    Good for you. I’m getting out of WF too for similar reasons.

  11. Jason says:

    Agreed. My problem isn’t so much with their plan, but the seemingly thickheaded approach to announcing it and then grudgingly holding onto it when it seemed obvious to me it would never stick (see Netflix).

    Hope I’m not stomping on your policy, Jim, but I wrote about this yesterday.

    http://www.senseofthefather.com/?p=700

    If that’s not appropriate feel free to delete it, just felt I had something to add.

    thanks

  12. Wilma says:

    I really think the occupy wall street movement had a big effect on this whole thing. It made the other banks hang back and let BoA try it first before they all jumped in too.

    People are just fed up being nickeled and dimed to death over every little thing. The Netflix fiasco is another example. A very small amount of money to rent movies on line or through the mail but it hit a nerve when they announced their price increase. I for one am sick and tired of cutting back and cutting back even more and only seeing minimal results in recent years. Frugal is in my blood and etched on my brain but once in a while I like to not be so conscientious of every expenditure.

    I left Wells Fargo because they started charging me a $2 check cashing fee and I didn’t write checks. If my new bank starts it I will bolt to a credit union.

  13. Online only banks are great, but I’m still going to keep a local option for some transaction that I prefer to do in person (i.e. cashing/depositing checks, getting cashier’s checks, etc.)

    But, typically you can avoid the heft fees and other nonsense coming from the too-big-to-fail banks by going with a local credit union. That’s where I’m keeping my face-to-face accounts.

  14. Scott says:

    There are bull shit fees on an account that you get nailed with for NOT using your debit card in a month. $14 fucking dollars to have MY MONEY in their shit hole establishment. I am leaving first chance I get to get into the bank. (also consider the fact that they were going to initiate the $5 PER TRANSACTION FEE? What the hell? It costs money to use a bank?

    FUCK BANK OF AMERICA
    FUCK BANK OF AMERICA
    FUCK BANK OF AMERICA!!!!

    (I apologize to those this message is not targeted to.)

  15. Scott says:

    I am sick of Bank of America. Here they charge a $14 month fee to NOT USE the debit card. Then they threaten to put a $5 per transaction fee on your debit card? You now have to pay to have your money in the bank? I am VERY PISSED. I am THROUGH!!! I will be very rude when I go in to close my account. So many things I would do if they wouldnt result in jail time…..


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