Banks backtrack on debit card fees
Steve Chiotakis: Bank of America stood alone, as the only major bank slated to charge customers a monthly fee for debit cards; now it has finally given in to the competition and backed away from the plan. But don’t go thinking that’s a victory for customers.
As Marketplace’s Eve Troeh explains.
Eve Troeh: Other big banks like Wells Fargo, Chase, and SunTrust backed away from plans to charge customers a few dollars a month for debit cards.
Greg McBride at Bankrate.com says those banks that chickened out have a list of other fees they can raise.
Greg McBride: Sort of the old stand-bys, things like ATM fees, overdraft fees, monthly service charges and balance requirements.
Customers may find it less painful to pay a bit more for something there were already paying for. The debit card fee was a new fee, and that’s why all the fuss, he says.
Lawrence Baxter at Duke School of Law says people also hate paying to access their own money. He says banks would do better to focus on how they add value for customers.
Lawrence Baxter: There are other areas where they provide services that I think people are more than willing to pay for — financial planning, safe deposit box fees, even certain types of online services.
While BofA is taking the hit now, all banks have to get find ways to squeeze more money from customers, since they all have expectations for high profits in the face of profit-shrinking regulations.
I’m Eve Troeh for Marketplace.
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