How to Avoid Bank Debit Card Fees

The announcement of Bank of America imposing a monthly $5 fee on debit cards used for purchases sent a shockwave across the country. The news was actually anticipated by those paying attention to the banking industry and should not have been greeted as such a surprise. Chase and Wells Fargo have already been testing similar $3 fees in select areas. On the heels of the Bank of America announcement came the news that Citigroup will initiate a new set of fees.

Customer fury at Bank of America was instantaneous with accounts being closed out. BofA merely shrugged it off in light that estimates are running as high as a $2 billion profit off those debit card fees for the nation’s largest bank. The banking industry’s position is that profits lost to recent government legislation must be made up. The major contributing factors are reduction in transaction fees collected from merchants and customer complaints concerning overdraft fees.

The ultimate culprit behind these debit card and other possible fees is the Obama administration and not the banks despite their outrageous greed and growing unfriendly customer attitude. The Obama administration stepped in with legislation bowing to the equally greedy merchants who vowed to pass the savings to consumers and have thus far been reneging and careless banking customers not paying attention to their financial records. When the Obama administration announced it would seek legislation to protect consumers and merchants from bank greed, the intention immediately rebounded when the banking industry warned lawmakers those profits would not be conceded and they would take it out on customers.

Once in place, these debit card fees are likely to never go away and become a fact of life and a portent of even more new fees to come. There is no need to accept these fees and contribute to bank coffers. Customers can go on the offensive by saying no and taking steps to avoid paying such fees.

There is one absolute everyone can do. Simply stop using bank debit cards for purchases period. That sends the strongest statement to banks by cutting off a lucrative revenue stream they earn by doing nothing for customers. Why bother using debit cards anymore these days? The incentives that banks used to offer in encouraging their customers to use debit cards for purchases have been eliminated or face extinction. Gone are reward points for cash back, merchant cards and air miles. Put that debit cards away or turn it in for a regular ATM card.

If you have to use plastic when buying, return to the tried and true usage of credit cards. The seduction of using debit cards over credit cards is based on no potential finance charges, however, it led to bank overdraft issues. You cannot get into credit card debt as long as statement billing is paid promptly in full. Some credit card companies still offer reward programs. Paying by check is an alternative though not practical. There is too much hassle in writing checks for a series of small purchases not too mention the financial record keeping.

The mightiest weapon against debit card fees or paying credit card charges? Remember cash? Once upon a time it was the norm to make purchases with cash. No fuss, no muss. You do not pay debit card fees or get into credit card debt or fall in the trap of purchasing on credit what you cannot afford by paying with cash. You pay for items with cash and that is the end of the matter. No debit card fees extorted, money owed to credit card companies or threat of interest charges. Some merchants even offer lower prices on cash transactions most frequently at gas stations. Use a fee free ATM and get cash.

If a bank still charges a fee whether or not a debit card is used then switch accounts or better yet, change financial institutions. The major banks no longer value their customers and deliberately offer paltry interest rates so it is a good idea to shop around for a bank who does desire your patronage. Smaller local banks are friendlier in wanting your business and usually waive fees. If you qualify, credit unions are an excellent option as they are non-profit.

The bottom line, to employ financial lingo, is to stop being complacent and taking whatever the big banks dish out. Consumers need to learn to say an emphatic “NO!” and take appropriate action. The banks are counting on their customers being lazy and only complaining while forking over $5 for no services rendered at all.