sead43
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Post by sead43 on Oct 1, 2011 15:47:59 GMT -5
thoughts on Bank of America announcing a $5-a-month fee for debit card use, with other banks reportedly following suit soon? as a BofA customer, i'm pretty annoyed to say the least...
Sen. Durbin seems to have a bit of egg on his face with this one...
a technical question too, for those who understand these things more than i do... when you swipe your debit card to make a purchase, you often have the option of choosing "credit" or "debit"; only if you choose debit do you have to enter your PIN. it it my understanding that if you choose "credit", the merchant swipe fees aren't limited in the same way by the new rules of Dodd-Frank-Durbin. does that mean that if i choose "credit" every time i make a purchase in a given month, i don't get the $5 fee charged to me??
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kchoya
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Post by kchoya on Oct 1, 2011 16:25:54 GMT -5
Wait wait wait! You mean there are unintended consequences when the federal government inserts itself into the middle of everyday life? Say it ain't so.
I thought Elizabeth Warren was going to save all of us and exile all the evil Wall Street people.
Good thing Obamacare will have none of these nasty unintended consequences.
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kchoya
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Post by kchoya on Oct 1, 2011 16:27:02 GMT -5
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Nevada Hoya
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Post by Nevada Hoya on Oct 1, 2011 22:52:59 GMT -5
kc, you will be pleased to know that Durbin was a 1966 grad too, but no, I didn't know him at GU.
Well, will the answer to the BofA greed be to use only your credit card?
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nychoya3
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Post by nychoya3 on Oct 1, 2011 22:55:44 GMT -5
All things being equal, at least checking account fees are transparent to consumers versus swipe fees on debit which were basically a tax on consumers they didn't know they were paying.
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Cambridge
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Post by Cambridge on Oct 2, 2011 10:49:09 GMT -5
BofA makes more money off their credit card business...so you'd be playing right into their hands.
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kchoya
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Post by kchoya on Oct 2, 2011 11:11:29 GMT -5
All things being equal, at least checking account fees are transparent to consumers versus swipe fees on debit which were basically a tax on consumers they didn't know they were paying. I'm sure that if the swipe fees were eliminated, the merchants would lower the prices a corresponding amount. Just like the airlines have done recently with the expiration of certain fees/taxes. |
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TC
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Post by TC on Oct 2, 2011 23:50:03 GMT -5
Well, will the answer to the BofA greed be to use only your credit card? Yes, or change banks. |
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hoyatables
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Post by hoyatables on Oct 3, 2011 8:43:44 GMT -5
I'll be honest -- I've never understood the appeal of debit cards. Aside from the rare instance when I want to get some cash out at CVS or the grocery store and save the trip to an ATM, why wouldn't you use a credit card? So long as you pay off the balance each month (no different than a debit card system because you're limited to spending what's in your account), the points/rewards are typically far better, and you build up a positive credit history. (Actually, as I understand it you build up a better credit history if you DO carry a balance.)
So what was the appeal/value of debit cards, anyway? Forced discipline for those who had none? Cash-less purchasing ability for those who couldn't get a credit card?
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EasyEd
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Post by EasyEd on Oct 3, 2011 9:04:16 GMT -5
Advantages of debit card: Convenience. Not having to carry cash. Not building up debt.
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TC
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Post by TC on Oct 3, 2011 10:40:39 GMT -5
I'll be honest -- I've never understood the appeal of debit cards. Aside from the rare instance when I want to get some cash out at CVS or the grocery store and save the trip to an ATM, why wouldn't you use a credit card? Some people don't make that a rare occurrence - it's possible to not visit ATM's at all and just use your debit card as your ATM while making everyday purchases. I'd guess the reasons people use them are forced discipline, a general distrust of credit cards, and ease of tracking (just check your bank account for transactions rather than bank account + 2 credit card accounts). "Not building up debt" is not a reason - if I pay my credit card bill every month, I don't build up debt and yet I also accrue benefits. That said, if Wells Fargo is charging a $3 fee per month, BofA is charging $5 per month, and my local credit union charges nothing, which one would you use? You have to also note that it doesn't matter if the consumer chooses credit or debit with their debit card - BofA is still going to charge the $5. |
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kchoya
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Post by kchoya on Oct 3, 2011 11:22:03 GMT -5
I'll be honest -- I've never understood the appeal of debit cards. Aside from the rare instance when I want to get some cash out at CVS or the grocery store and save the trip to an ATM, why wouldn't you use a credit card? So long as you pay off the balance each month (no different than a debit card system because you're limited to spending what's in your account), the points/rewards are typically far better, and you build up a positive credit history. (Actually, as I understand it you build up a better credit history if you DO carry a balance.) So what was the appeal/value of debit cards, anyway? Forced discipline for those who had none? Cash-less purchasing ability for those who couldn't get a credit card? Much easier to do the charge everything and pay it off every month when you're a high-powered attorney.  |
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nychoya3
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Post by nychoya3 on Oct 3, 2011 11:41:23 GMT -5
Hm. I'm pretty sure classical economic theory suggests they would lower their prices due to competition. Are you suggesting that the free market doesn't always work as it's predicted? Sarcasm aside, yeah, I'm well aware. But debit at par to check clearing makes a whole lot of sense to me. And while WalMart benefits, there are also a lot of small merchants with razor thin margins who benefit as well (restaurants, corner stores, etc.) All things being equal, at least checking account fees are transparent to consumers versus swipe fees on debit which were basically a tax on consumers they didn't know they were paying. I'm sure that if the swipe fees were eliminated, the merchants would lower the prices a corresponding amount. Just like the airlines have done recently with the expiration of certain fees/taxes. |
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sead43
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Post by sead43 on Nov 1, 2011 11:58:35 GMT -5
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TC
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Post by TC on Nov 1, 2011 16:37:54 GMT -5
Who would have guessed there were unintended consequences to banks trying to screw their customers? (i.e. people closing their acounts)
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EasyEd
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Post by EasyEd on Nov 1, 2011 18:17:43 GMT -5
Who would have guessed laws limiting what banks could charge on credit cards would lead banks to want to ensure they are making a profit by raising revenue some other way?
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vcjack
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Post by vcjack on Nov 1, 2011 18:29:18 GMT -5
Who would have guessed laws limiting what banks could charge on credit cards would lead banks to want to ensure they are making a profit by raising revenue some other way? So usury laws are pointless? Does the Church still think of usury as a sin? I know they've come a long way from the Medieval point of view of any interest=evil but still, I'd think they are in favor of laws limiting what banks can charge |
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PhillyHoya
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Post by PhillyHoya on Nov 1, 2011 18:52:55 GMT -5
They may have dropped the fee but I'm still closing my account next week. (I was going to do it even before the fee was announced.)
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TBird41
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Post by TBird41 on Nov 1, 2011 20:46:59 GMT -5
Who would have guessed laws limiting what banks could charge on credit cards would lead banks to want to ensure they are making a profit by raising revenue some other way? So usury laws are pointless? Does the Church still think of usury as a sin? I know they've come a long way from the Medieval point of view of any interest=evil but still, I'd think they are in favor of laws limiting what banks can charge Economically, usury laws are inefficient. |
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hoyainspirit
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Post by hoyainspirit on Nov 2, 2011 9:17:19 GMT -5
Economically, usury laws are inefficient. But quite necessary in the real world since the assumptions behind free, efficient markets rarely, if ever, obtain. I, too, was ready to dump my BofA account, not because I couldn't afford the $5, but because it Editeded me off. |
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