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> Friday's disruption came the same day that BofA said it would begin charging customers $5 per month for purchases billed to their debit card. Does anyone hav

> Friday's disruption came the same day that BofA said it would begin charging customers $5 per month for purchases billed to their debit card. Does anyone have more details on this? The units don't seem to match in "per month for purchases" - like, $5 per purchase? $5 a month? $5 a month, but only on months in which you make at least one purchase? And for heaven's sake, why?

bingaman 15y ago
http://www.nytimes.com/2011/09/30/business/banks-to-make-customers-pay-debit-card-fee.html http://www.nytimes.com/2011/09/30/business/banks-to-make-cus... Because fuck you, that's why.
- neilc 15y ago
  > Because fuck you, that's why. No: The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. Given the low rate of fraud on debit card purchases, banks were previously making a killing on from debit card fees; with those fees reduced, they need to find an alternative revenue stream. US banks aren't exactly doing well these days, so their need to replace that revenue with something else is understandable.
  - pavel_lishin 15y ago
    Sure, just like a lion's need to eat zebras is understandable. But the zebra is still going to be pissed, and will probably switch to another bank or credit union.
    - hugh3 15y ago
      And the zebra won't miss it at all, because the zebra wasn't making the lion any money. This metaphor is severely broken at this point, but you get the idea.
      - Florin_Andrei 15y ago
        You folks are so blindly enamored with the "free market" that you'll keep singing them praises even as they go about skinning you alive. Pavlov would be proud.
        Jach 15y ago
        I don't consider myself a heavy supporter of traditional free market idealism, but it's clear to me that the credit and banking industry has long been in bed with the government. The government says X so company does Y, the government says don't do Y so company does Z, and they're all probably winking and nodding behind closed doors. With a government separated from such industries, I believe we'd actually have some decent choices instead of "Visa or MasterCard?" and "BoA or Wells Fargo?" (Of course there are credit unions but they're only bandaids.) I don't know of anyone who supports free market ideals saying you should let sociopaths skin you alive, let alone singing praise. Some of the meaner people in the crowd do say "let the stupid people be exploited, it's their own fault if they don't realize they're being skinned and their stupidity keeps these things in power." I don't particularly agree with that sentiment, though it is rooted in another one: if customers are truly pissed, they'll go somewhere else [in the absence of government/monopolistic forces preventing them from doing so].
  - eli 15y ago
    Yes, and now instead of making a killing, debit card purchase fees are merely very profitable. I don't see how limiting these fees required BoA to institute a new monthly charge, nor do I assume that they wouldn't have added it anyway.
    - Duff 15y ago
      Something like 75% of Americans don't have $2,000 to their name. So the bank isn't making money in the ways that they traditionally did (lending deposits). Basic banking services are not profit centers for banks at all. They only offer those services at low cost because the government forces them to. Basically, the upside to a checking account for a bank is that the bank has a platform to spam you for loans and other services.
- rick888 15y ago
  This is a typical response from someone with the social skills of a child. But this seems too common these days..
hugh3 15y ago
Five dollars a month, for any month in which you use your debit card for purchases. As for the "why", the immediate reason is because there have been some legal changes vis a vis how much they can charge to the merchant for the benefit of running this transaction. More generally, because they want to incentivize people to use their credit cards instead of debit cards. And for those who can't or don't want to get credit cards -- to incentivize them to take their business elsewhere, because the bank really doesn't make any money off people who just have checking accounts. Checking accounts are merely a gateway drug to more expensive banking products. Doesn't bother me, I get 1% cash back on my credit card and am not dumb enough to spend more than I earn on it, so I already have no incentive to use my debit card for purchases.
- pavel_lishin 15y ago
  I'm annoyed at this, but I probably won't switch. I rarely use my debit card to make purchases, since I have a BoA credit card with reward points - and I've heard that debit card fraud is more difficult to combat. Do most people shop with their debit card?
  - click170 15y ago
    In Canada we do. I think the reliance on credit cards is largely an American phenomenon.
    - mahyarm 15y ago
      In Canada, people don't use Visa or Mastercard Debit cards. They use Interac, a Canadian financial network that only charges a flat fee of ~0.25 per debit card transaction. You can't use them for online purchasing although. Most Canadian's are surprised when you can use a debit card like a credit card for online purchases.
      - msbarnett 15y ago
        The phrasing of your last two sentences is unclear, but to clarify for those reading, you can indeed use Interac debit cards for online payments.

bingaman 15y ago

http://www.nytimes.com/2011/09/30/business/banks-to-make-customers-pay-debit-card-fee.html http://www.nytimes.com/2011/09/30/business/banks-to-make-cus... Because fuck you, that's why.

neilc 15y ago
> Because fuck you, that's why. No: The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. Given the low rate of fraud on debit card purchases, banks were previously making a killing on from debit card fees; with those fees reduced, they need to find an alternative revenue stream. US banks aren't exactly doing well these days, so their need to replace that revenue with something else is understandable.
- pavel_lishin 15y ago
  Sure, just like a lion's need to eat zebras is understandable. But the zebra is still going to be pissed, and will probably switch to another bank or credit union.
  - hugh3 15y ago
    And the zebra won't miss it at all, because the zebra wasn't making the lion any money. This metaphor is severely broken at this point, but you get the idea.
    - Florin_Andrei 15y ago
      You folks are so blindly enamored with the "free market" that you'll keep singing them praises even as they go about skinning you alive. Pavlov would be proud.
      - Jach 15y ago
        I don't consider myself a heavy supporter of traditional free market idealism, but it's clear to me that the credit and banking industry has long been in bed with the government. The government says X so company does Y, the government says don't do Y so company does Z, and they're all probably winking and nodding behind closed doors. With a government separated from such industries, I believe we'd actually have some decent choices instead of "Visa or MasterCard?" and "BoA or Wells Fargo?" (Of course there are credit unions but they're only bandaids.) I don't know of anyone who supports free market ideals saying you should let sociopaths skin you alive, let alone singing praise. Some of the meaner people in the crowd do say "let the stupid people be exploited, it's their own fault if they don't realize they're being skinned and their stupidity keeps these things in power." I don't particularly agree with that sentiment, though it is rooted in another one: if customers are truly pissed, they'll go somewhere else [in the absence of government/monopolistic forces preventing them from doing so].
- eli 15y ago
  Yes, and now instead of making a killing, debit card purchase fees are merely very profitable. I don't see how limiting these fees required BoA to institute a new monthly charge, nor do I assume that they wouldn't have added it anyway.
  - Duff 15y ago
    Something like 75% of Americans don't have $2,000 to their name. So the bank isn't making money in the ways that they traditionally did (lending deposits). Basic banking services are not profit centers for banks at all. They only offer those services at low cost because the government forces them to. Basically, the upside to a checking account for a bank is that the bank has a platform to spam you for loans and other services.
rick888 15y ago
This is a typical response from someone with the social skills of a child. But this seems too common these days..

hugh3 15y ago

Five dollars a month, for any month in which you use your debit card for purchases. As for the "why", the immediate reason is because there have been some legal changes vis a vis how much they can charge to the merchant for the benefit of running this transaction. More generally, because they want to incentivize people to use their credit cards instead of debit cards. And for those who can't or don't want to get credit cards -- to incentivize them to take their business elsewhere, because the bank really doesn't make any money off people who just have checking accounts. Checking accounts are merely a gateway drug to more expensive banking products. Doesn't bother me, I get 1% cash back on my credit card and am not dumb enough to spend more than I earn on it, so I already have no incentive to use my debit card for purchases.

pavel_lishin 15y ago
I'm annoyed at this, but I probably won't switch. I rarely use my debit card to make purchases, since I have a BoA credit card with reward points - and I've heard that debit card fraud is more difficult to combat. Do most people shop with their debit card?
- click170 15y ago
  In Canada we do. I think the reliance on credit cards is largely an American phenomenon.
  - mahyarm 15y ago
    In Canada, people don't use Visa or Mastercard Debit cards. They use Interac, a Canadian financial network that only charges a flat fee of ~0.25 per debit card transaction. You can't use them for online purchasing although. Most Canadian's are surprised when you can use a debit card like a credit card for online purchases.
    - msbarnett 15y ago
      The phrasing of your last two sentences is unclear, but to clarify for those reading, you can indeed use Interac debit cards for online payments.