Bank of America, SunTrust announce service charge for debit card use
Has your bank notified you of new fees for using your debit card?
Bank of American just announced that they will begin charging customers $5 a month if they use their debit cards for purchases. The fee won’t be charged to customers who only use their debit cards at ATMs. The fee begins early next year.
SunTrust has also announced they’ll charge customers who use debit cards for purchases. A colleague who banks there said she received a letter notifying her of a $5 per month service charge. She said she’s dumping them and going with Charles Schwab online banking.
Wells Fargo will begin testing a $3 monthly “activity fee” for debit cards in several states in October (Virginia is not one of them).
The fees are the result of the Federal Reserve’s ruling to cap debit card swipe fees collected by banks. The 21-cent cap goes into effect Saturday.
The banking industry has said the cap will cut into revenues and doesn’t cover the cost of providing checking accounts, hence the fees that we’re starting to see.
According to a Wall Street Journal story, Bank of America said the cap will result in a $2 billion loss in revenue. Indsutrywide, the cap is expected to result in a $6.6 billion loss of revenue, according to the story.
If your bank is charging a $5 monthly fee will you still use your debit card for store purchases?
September 29, 2011 - 2:35 PM
Nope. I haven’t used a bank in years, but I know if my credit union started doing it, I would stop using it and go to cash only. The banks can take pay cuts like the rest of America has dealt with for years.
I agree with OJ. I’ve been with Bank of America a long time. The $5 a month comes out to $60 a year. That’s a ridiculous amount to use my own money. They don’t even charge people that much to have a credit card. If they start charging me, I’m sure several other financial institutions would like to have my money and other financial accounts.
Generally the credit unions have lower fees. I’d say the credit unions will start seeing lots of new faces soon.
I’m closing my Suntrust account and going with Freedom First Credit Union. I have a loan there, just needed an extra push to move everything over. $60/year is more than enough of a push.
I’ve never used my card for purchases, and frankly I’d rather they disable that “feature”. At least with credit cards I have a chance to dispute fraudulent/stolen-card charges *before* I have to pay; with debit cards you might be left with a drained bank account until you manage to resolve the situation.
I have a Kroger charge card. They recently changed from Mastercard to Visa. Yesterday I was in Sams and didn’t even think about it (they take MC but not Visa), and had to use my Wachovia debit card (the first time I have ever used it except for ATM withdrawls). I wonder how many others will find out this as they check out? That means that I cannot buy gas at Sams (usually the cheapest) unless I get a Mastercard. And if Wells Fargo starts a fee in Va, I’ll opt out. Wonder if banks will charge the fee only for months it’s used?
@david: To answer your question – yes, they’ll only charge you for the months that you use the debit card on purchases.
@Amanda
For now anyway, I have a feeling that if you rarely use your debit card then you’ll get charged an “account maintenance” fee or an “inactive account” fee or something along those lines.
Wow. Something is wrong here. This is tremendously disrespectful for customers. How many people will think “It’s only $5, it’s not worth the hassle of ordering new checks”?
The charge is just small enough to keep from attracting too much attention to itself on your monthly statement, yet when magnified by the millions of account holders it will become a significant income source for the bank.
Do not be fooled. Banks are NOT losing money, unless they plan to lose money (as the mortgage crisis has proved). Like many business interests in the US, they’ve simply found another way to mistreat the very people who put them in business in the first place.
NO NEW TAXES–but blindly accept a fee to use a debit card to access your own money? (You have already paid them for this privilege–they use your money as collateral to make money. That’s what banks do with your deposits, in return for keeping them safe so that FDIC insurance will cover should loss occur).
Bigger is not better, in this case. Unless you’re the one that’s bigger. And you sit in a very, very high level of upper management.
Plain old greed by these banks. I use Suntrust and have been with them for years, but I am considering a CU
Hey I’m just as cheap as everyone else. But I pay to have a cell phone. I keep buying gas to drive around(and don’t tell me you just drive straight to work and home and nowhere else… I know there’s leisure in there too), no matter how high they raise fuel prices. I even spend a whole hour’s pay for that cool new tube of mascara. Etc, etc, etc. And I generally don’t gripe about those things. So why all the griping when banks, which are a for profit business, charge for their services?
I have been with Suntrust for over 10 years. I was just wondering because I haven’t received anything in the mail (yet) will they send a letter notifying that they will also be charging for the debit card use? I will switch to another bank or a credit union once I received the verification.
I’ve banked with SunTrust for years and been very satisfied. But they’ve driven me away with this change. I won’t have a credit card that charges an annual fee, I’m sure as heck not going to have a debit card that does! I’m not going to pay to access my own money! They’re already using my money anyway.
I sat down last night and made a spreadsheet comparing checking accounts at different area banks. I’ll be switching to one of them in October. I’d love to switch to a credit union but I live and work in Craig County and haven’t been able to find one that I can join.
I have a debit card that I use several times weekly for purchases – all of them as though it were a credit card. Fortunately for me, I was smart enough to choose my hometown bank as one that does not seek every possible opportunity to gouge their customer. What these big banks fail to understand, in their myopic perspective of only examining one accounting line at a time, is the goodwill engendered by not hosing their customers by charging customers to use debit cards. That goodwill translates into bottom line value, but the bean counters refuse to acknowledge that, evidently.
Like I’ve said before, I hope the banks that do this go under and are forced to close. Anyone who has an account with these banks and meekly accepts this outrage deserves the sacrifice of paying through the nose. If folks took a stance and left these banks, the surcharges would stop. If you meekly accept the bullying like sheep, then the surcharges will continue, and will spread to other areas.
It is all on the customers of these banks. Either move your account, or take your abuse. No ground in between, those really are the only options. No excuses of – ‘Well, I really like Sally down at the nearby bank, and it is convenient, so I’ll roll over for their corporate interests…’ No, either move your accounts – the only action that gets noticed – or take your punishment and stop talking about it. That’s the way the big boys play, whether you like it or not.
@David you can you any credit card at the gas pumps at Sams, it is not strictly for mastercard.
We got a letter from SunTrust that said the member program we were in was ending and we would be charged $5 starting in November. I didn’t even know we were in a special program. When we went to the bank to ask them about it they said that since we have our mortgage through SunTrust we qualified for a different program that does not charge for the debit card, so we switched to that. If they hadn’t done that, we would have changed banks for our checking accounts.
I’m sure that some banks or CU’s will capitalize on this by keeping their cards free, sort of how some kept free checking while others didn’t. To me, $5 a month simply isn’t worth it when it was a free service previously.
What this will do is either push people back to cash and checks, or more people will use a regular credit card instead of a debit/check card. For me, the only non-debit cards I have are store-specific for discounts at places we buy bigger-ticket items, and that’s it.
So, if these fees or something else finds its way to my accounts, I’ll go cash/check only. It’ll be inconvenient as anything for things like buying gas (since most are cash pre-pay only, except at Sheetz with the My Sheetz Card).
I feel that a better way of handling this might have been allowing a certain number of transactions per month, say like 5, and anything over that, then enact a fee. Paying $5 for just a single transaction, if that’s the only one you make, is ridiculous. And, I’m sure there’s a lot of people who only use their card a couple times, so the banks will be making a relative killing off those folks.
I do not use debit cards, but if I did and if BB&T did that to me, I would drop them immediately. I have Zero tolerance for these antics. I am dropping Netflix b/c of their greed and will not hesitate to do the same with any other business that does that to me.
Many banks give you a card that lets you use it as either a debit or credit card. Does this trend mean they are going to charge you for using that card in general, or only if you select Debit as the payment method?
I bank with Suntrust. Not only will they be charging for debit card use, but they are instituting monthly fees on my checking account unless I maintain an average daily balance of $500. From what I can tell, this applies only to my checking account and not linked accounts. The fee on the checking account is $7/month. Since I will be facing fees of $12/month ($144 a year) to bank with them, I will be taking my funds to Freedom First, where my husband banks. I have 3 accounts with Suntrust, and they will be charging me more in fees than I make in interest off all three accounts.
I suppose there is a good side to this, as it will now be easier for my husband and I to consolidate our accounts, something we’ve been meaning to do since we were married 4 years ago.
So if we have a Suntrust Debit/Check card, does this mean if you use your card as a check card they will charge you, or only when you make a purchase by putting a pin number in?
@david: Visa works fine at the Sam’s Club pumps, even though it’s not allowed at the sales register.
BB&T did away with Free Checking a few months ago so my husband & I took our accounts to StellarOne and we are happy. They reimburse ALL ATM fees which is very nice.
We left BofA several years ago. Even tho we were longtime customers, we got a letter canceling our free checking & advising of a new monthly fee. Were not given any options. At the local branch, we told them to cancel our acct. THEN they offered a special deal to retain our old acct! Told them, sorry, too late, we’re out of here.
Your best choices now are a credit union or local banks, esp. Hometown & First Citizens. Friendly service, knowledgeable people, AND few fees. We’ll never return to the big banks.
@Melissa: I’d hope they would notify you somehow. I’ve read in other news stories that BOA customers with premium accounts aren’t subject to the fee. I don’t know enough about SunTrust’s checking accounts and rules to know whether any of their checking accounts are exempt.
@Colin: If you can use your card as either, then it’s really just a debit card. Merchants have two types of networks to run cards: and ATM (or debit) network, and a credit card network. They can run your debit card as a credit card and sometimes choose to do that because the fees merchants are charged on the credit card network are less than the debit card network.
@Bill: My understanding is that if you use your debit card to make purchases, pin or no pin, you’ll be charged.
I bank with BBT and currently do not pay any fees for my checking account there. I use my debit card for almost everything, and rarely have cash on me. If they start charging me for using my debit card, I will start looking around for another financial institution to move my account to. I cringe at the idea of going back to writing checks for everything.
So if we have a Suntrust Debit/Check card, does this mean if you use your card as a check card they will charge you, or only when you make a purchase by putting a pin number in?
Comment by Bill — September 30, 2011 @ 9:39 am
Bill, the information I received from Suntrust states that no matter how you use your card, whether you sign for the purchase or use your pin, you will be charged the $5 fee.
Here’s a question I just thought of – my wife and I each have a debit card, linked to the same checking account. The card numbers are different, but they draw from the same account.
Wonder if the bank will charge $5 PER CARD, per month? They certainly won’t be doing that to us. I will be moving everything to one of the credit unions we belong to.
The stuff is starting to hit the fan.
Folks, the big banks are having their cake & eating it too! How often do I ask a client whether they want to use their debit card as debit or credit? Invariably they will say “credit” because their bank told them that was the best way.
Reality for the consumer, either way it comes out of your account at the end of the day. But… As a credit card use, the issuers are getting an additional 2-3% from the merchant.
So you pay the $5 and the merchant pays another % for your convenience and the banks are the winners…
I bank with Suntrust. I spoke with a manager at the bank and he said only the customers with a classic debit card will be charge the $5 fee.
@ David
You can use Visa at the Sam’s pump. I do it all the time!
Even though no one wants to pay fees for an account, with the changing economy we dont have much a of a choice. I feel we as the consumer just hear FEE .. but we dont actually take time to see where these fees are coming from. If the government did not step in and begin putting all these regulations on the banks then all these services would still be free of charge. The banks are businesses- there are things that need to be paid for. Employees, buildings, computers, software,online banking apps, mobile apps, check cards, atm’s, atm maintenace- these things are not free .. where do we think this money comes from?? They need to make a profit just like anyone else does? I wish people would really read up on WHY the banks are making these changes instead of just assuming they are trying to “rob their customers”
PS to “The Other Rick” The check card fees are being charged per account level not per card level.. so you will only be charged ONE fee.
I had to change my account type with Suntrust because they had changed the requirements so much. I refuse to pay them the $5 a month for their debit card. I hope they lose lots of customers because of this. I only wonder where the money is going from all the banks charging these fees. I bet the CEOs are getting more big bonuses and all this money is going to pay them.
I just wish the banks would give one options to waive debit card fees such as having a savings account and for the bank to do automatic transfers from your checking to savings to waive the debit card. This would encourage saving money and keep customers.
I for one will be shopping for another bank.
THIS HAS BECOME GREED IN AMERICA