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Paying with a credit card is about to get a whole lot more popular for BOA customers. Bank of America has announced plans to charge a $5 monthly debit card fee. This is yet another move among card issuers in response to the new regulations on swipe fees, which are expected to reduce revenue.
The fee will be levied on customers who have basic checking accounts. Customers must use the card to make purchases in order to incur the fee. Those who do not use a debit card or only use it for ATM transactions in a given month will not be charged the fee. Customers with premium checking accounts will not be charged the fee, as well.
The fee will be implemented in select states in January. The states to be affected first have yet to be announced.
Prior to Warren Buffet’s bailout of the company recently, they had significant setbacks, perhaps adding to the desire for this fee. In addition to the new regulations, failed mortgages and lawsuits have eaten away at the company. Their stock has lost almost half of it’s value this year. Additionally, Bank of America announced plans to cut approximately 30,000 jobs.
So, if you have a Bank of America debit card that is tied to a basic checking account, you’ll have to pay a $5 monthly fee for anything in excess of ATM transactions. That comes out to $60 annually if you use it each month for purchases. That’s not the end of the world, but it’s another $60 down the drain in a tight economy – on top of declining rewards. Will you keep your Bank of America debit card or will you shop around for a better deal?
In the past, many fees could be waved simply by contacting customer support, however something tells me that isn’t going to cut it with this new universal fee.
The first, most obvious answer is to just switch banks. However I would actually hold off to see which banks end up implementing a debit card fee because of the new swipe fee regulations. Bank of America wasn’t the first, and they won’t be the last to implement this new policy.
There is also the option of getting rid of your BOA debit card, while keeping your account. Ditching your debit card completely may be a hard adjustment but it’s not impossible. You can pay your bills and online retailers by electronic check which is a great alternative to using a debit card. Many popular online retailers including Amazon support this feature. You can then use a credit card for all of the other purchases that you usually make with your debit card, and pay the card off in full each month with an electronic transfer from BOA.
At the end of the day, it is completely possible to live without a debit card, and with attractive rewards programs offered by cards like American Express Blue Cash and Chase Freedom you may even be better off. If you do go the credit card route, just use the card responsibly and make sure to pay off your balance in full each month.