Lynn:
If you don’t wish to get onto the happy fun free stuff big pimping gravy train, and instead prefer the dull grey mopeland of debitry… Well, we will miss you, and be sure and save you a seat in case you change your mind.
Could someone please pass the double bonus mile champagne?
Yeah, all this means for me is that I’ll use my credit card for all my small and daily purchases instead of by debit card. It’s something I’ve been meaning to do, anyway, but I’ve read the debit transactions cost the merchant less, so I generally do small transactions as debits. Not any more.
I placed no blame for the “financial crisis” on consumers. Out of the financial crisis caused by the mortgage situations, new regulations were enacted. Some of those regulations were specifically geared towards overdrafts and now merchant interchange fees. Neither item had anything to do with the mortgage situation, it was regulations to supposedly help the consumer who felt they were being unfairly charged fees on their accounts. In my opinion, the consumer was to blame for the fees based upon their behavior. These fees were disclosed and those of us responsible with our money did not incur them.
You have an axe to grind with banks over the mortgage crisis. I have no problem with that and in fact would probably agree with you. I do NOT agree that consumers were being treated unfairly by spending more money than they had in their accounts and thereby being charged fees by the bank for it.
MeanJoe
This makes me chuckle. Durbin sponsors and gets legislation passed to limit bank’s revenue off of interchange for debit card transactions then calls them out for finding new fee revenue for the debit cards to replace the revenue they’ve lost due to his regulations.
Look, I’m a Democrat. I’m in favor of more government oversight of the banking industry so we do not have a repeat of the mortgage lending crisis and other investment house-of-cards that may risk my money and our country’s economy. This response though is just sheer stupidity. What did he think the bank’s were going to do? Not make money on their debit cards? A basic checking/savings account costs the bank money. Put your money in your bank’s checking/savings account and pay bills via Internet Banking, go to the branch to deposit checks, write checks from your checkbook, these things all result in a bank losing money on the account(s). They off-set this loss by gathering revenue from the interchange on debit cards. Take that away through regulation and like any business when facing a revenue drop, they will find new ways to make money.
MeanJoe
You know, I’m right here. 
This is generally speaking true*. When you use your debit card, you bank has (historically) made money on the transaction. When you use your credit card, the bank has to pay money on the transaction. Shifting to a credit card may help you avoid fees on your debit card and it will cost your issuing bank more money on the transaction. However, it does not really help the merchant involved. They’ll still have to pay their interchange rates on the transaction to Visa, MasterCard, Amex, Discover, etc.
Clarification: does this fee apply to POS purchases only, or any non-ATM use? 'Cause I have a bunch of bills paid automatically from my check card (rather than my checking account). :mad:
Credit unions aren’t so pressured to make BIG BUXX, and so don’t do the unethical things that some of the bigger banks have been up to as well.
The overdraft fees? Yeah, you screw up, you pay a fee, that’s only fair. But the bank deliberately ordering transactions for maximizing their profit? Unethical.
BofA in particular has been famous for pulling tricks to shaft its consumers. A fellow Doper had them jerk him around for SIX MONTHS on a house refinance. Several of us have had them change our account numbers without reason, screwing up automatic payments and hitting us with interest and late fees. They’ve been major culprits in the whole mortgage meltdown mess including illegal home foreclosure.
FYI - the single thing I can’t do at my credit union, that BofA could do, is automatic downloading of transactions to my Quicken desktop. Oh well - I have to take 2 minutes to go to the CU’s website and initiate the desktop. If I did all my recordkeeping online with Mint, I wouldn’t even need to do that - that’s supported by even more institutions. And there are credit unions that DO offer the service.
What do you need to do at Chase that you couldn’t do at a credit union or small bank?
Yeah, the big banks offer some services like business accounts, that CUs don’t (but smaller local banks probably do). I’m not saying they should go away, by any means.
But the free market will bear out whether that 5.00 a month fee is reasonable, as long as there are other institutions that don’t impose it, anyone who CAN move away from them will do so (or deserves the fee for being too lazy to move).
I see that some people are questioning the purpose of the restriction on interchange fees.
For me, it’s pretty obvious, and illustrated by this question. Have you ever made a decision on what card or what bank to use because of the interchange fee? Of course you haven’t - nobody ever has. So you have a situation where the large banks can charge retailers high fees with the retailer having little to no options (these are all handled by a very small number of interchange operators, IIRC) and the consumer not even being aware of it.
Now, those fees are limited. Instead, the consumer is faced with paying the cost of his transaction directly, rather than through a third-party interchange that he has no control over, and likely no knowledge of. Suddenly banks are actually competing for customers in a true free market - not taking profits through a non-competitive interchange system.
Or, put another way, if BOA loses customers because of this fee and a credit union or small bank picks up new ones, isn’t this exactly the type of free-market activity that is a good thing?
You can’t be so insecure that someone else’s having different consumer preferences than your own actually bothers you this much.
Of course, by going this way, you’ll be playing right into their hands:
I think we should all go back to using checks :). (not entirely joking, actually).
One off-topic observation / vent: Because of the increasing dominance of debit cards and credit cards for virtualy ANY purchase, it’s that much harder for anyone to really keep GOOD track of their spending and budget. Studies show that people using plastic (of either variety) consistently spend more than people using cash. It’s in the banks’ and merchants’ best interests to encourage such use, vs. cash - sure, the merchant is hit with a fee but overall I’d bet their profits are higher.
Just for shits&giggles once the holiday season is over: I think I’ll start taking cash out of the bank for grocery shopping and maybe for other purchases, and see how that affects my spending.
For my own edification- and yours!- I just went through every policy document BofA has ever sent me concerning my checking account- thank god for Acrobat- and I’m quite certain there’s nothing in there about letting them rearrange my transactions to suit their needs.
I was kind of kidding.
Wait - what??? I have never heard of such a feature. And if my bank offered it, I wouldn’t take it - too easy to lose track of stuff that way and start bouncing checks.
One solid argument for mandating lower fees on debit transactions is that the bank’s cost is, arguably, substantially lower. With a debit, the bank gets its money from you almost immediately - a day or two or however long it takes such things to go through the system. With a credit card they generally have to wait til the end of the month or longer - e.g. my credit card cutoff is the 28th, if I buy something on the 29th of September, I"m not even billed for that until October 28th, and I don’t have to pay for it until mid-November.
Plus, there are fewer protections for debit card purchases than there are for credit-card purchases - so the bank’s exposure there is lower as well. Less risk of fraud too - something processed as a debit-card transaction requires a PIN, which a casual thief is less likely to know.
The new law: How does it affect debit-card transactions that are handled as credit card (no-PIN) transaction? As I understand it, right now, PIN-based transactions are less costly to the merchants than when you run it through as a Visa or Mastercard “credit” transaction.
I work for a fairly small regional credit union. In addition to phone and web- based banking, we offer the ability to check your balance and recent transactions via text message. We have an iphone and android app. You can scan your checks at home to deposit them, and soon you’ll be able to do that with your phone. We have shared branching with a million other credit unions, effectively making us orders of magnitude larger in terms of physical coverage.
And all of that is free. I’d be curious to know what technological innovations you think we are lacking.
Oh, we’re not, that’s true. However, we are immune to pressure from shareholders. We’re okay with not making gobs and gobs of money from our members, because our members are also our owners.
You have to get the sign up deals. For example my last Chase’s British Airway card gave 50,000 points for getting the card and another 50,000 for spending $4000 on it within 90 days, or something like that. Like you said, actually ‘earning’ that many miles is crazy - at 2%, you’d need to blow $5 million on the card (not bloody likely). But $4,000? Easy. But you gotta use it for eveything
And I probably will, in fact, use it to fly to Thailand, probably stopping in Hong Kong for a few days.
Hotel points can be a little easier. The HHonors Amex gives you free Gold status for a year - which means you get free space available upgrades at any Hilton (which, in turn means free access to the executive lounge - which means free breakfast, and free booze - all you can drink for the 3 or 4 hours it’s on. And once you have Gold, when you book a room using the amex, you get 15 base points, 9 points for using the card, +50% for choosing Hilton as your partner (you could do an airline instead), +25% points for being Gold, plus 2500 for booking with Amex. Also, they were giving double points for a good part of this year with the Q3 Pick offer. So my $1000 stay in Iceland got me about 34,000 points. For 50,000 points, I can stay at any Hilton, including ones that book for upwards of 600 to 1000 dollars per night. But when you consider that I also ate breakfast for free 5 times, got free wi-fi, free water, free access to the spa and massages, and had about 30 free (expensive) drinks an a few nights of free appetizers, I’d say they have to be losing on me…
I think I’ve gotten my 175 out of the card already. I have 171,000 points, roughly - I’m going for 200 or 250, so I can get 4 or 5 nights at a place that would be at least 800 normally (which I would never spend).
On top of everything else the HHonors Amex has a an intro rate of 2.9% And the annual fee is $75, not $175 (but they don’t waive it in year one). Here’s a link - they’re still giving 40,000 bonus points off of the bat and another 20,00 as you book rooms.
Assuming they did disclose the practice, it’s absolutely a legitimate business practice and absolutely they should enforce the term against customers. And if I were stupid enough to sign something without reading it, then I deserve to pay then penalty for my stupidity.
Assuming they did not disclose the practice, however, I concur in the view that imposing it unilaterally is a breach.
I asked him something similar. No answer. One can conclude that yes he does. If the contract states (buried in 64 pages of legalese with highly specific legal meanings that don’t match common English) BoA can lope of a hand for being late Bricker thinks you should be minus one hand.
Let me get this straight. The contract is probably written legalese, que no? Which is meant for lawyers. Is it your position that everyone should take law school before they can so much as even buy bacon salt off the internet, or is it they should plunk down a thousand in legal fees to have a lawyer go over all their contracts with them?
Which is it, tons of legal schooling, or tons of legal fees you think should be inflicted on everyone else for something so small as buying a pack of gum with debit?