I am a member of 4 credit unions. None are close to me but thanks to the Credit Union Service Center I can do transactions in person.
Alliant Credit Union is the main one I use because I can deposit checks from home. If you don’t qualify to join directly by where you work or live you can join Foster Care to Success and then qualify.
Is it really spite to say “you know, I’m no longer going to support a company with my business when they do things like this.” I don’t think it is. Spite would be “they made me mad, so I’m taking my toys and leaving.” This is about principle, not anger.
The person with $5,000 or $50,000 or $500,000 in the bank doesn’t have to pay this fee, even though they’re likely to have more transactions than the people who will pay the fee, and the people who pay the fee are more likely to have their transactions be for necessity purchases and bills. That should offend anyone who has a sense of justice.
There’s really not a big distinction there. What makes it not spite is that it’s capitalism. If you don’t like what someone is doing, you don’t give them money. They willingly joined into that system. If it was in their own financial best interest, do you not think they’d drop you as a customer?
It’s not spite. It’s business.
Go Credit Union.
They offer cards.
And almost everyone can qualify as a member, especially for regional credit unions.
Where does anybody come off complaining about the cost of a service. As if they had a right to that service for whatever they wanted to pay…if they wanted to pay at all.
If you don’t like it, go somewhere else.
Now if all the providers get together to set the price that is different…then we’d need Dick Durbin, Barney Frank and Chris Dodd to come in and fix everything !
Fractional reserve banking means that the bank can loan out much more than it has in deposits.
However, the bank can currently borrow from the Fed at ~2%. So it wouldn’t surprise me at all that servicing an account with $2500 in it costs more than $50/year, which is the cost of obtaining that money elsewhere.
I don’t think thats right. By my understanding, fractional reserves mean the bank lends out up to some fraction of the total amount of deposits, not that it can multiply the amount of money in has in deposits and lend that out. So if I needed to keep 10% in reserve and had 100 dollars in deposits, my bank could lend out 90$, not 1000$, as you seem to be saying.
Here’s the first paragraph of the wiki article, which I think supports my understanding:
So the bank only retains a fraction of total deposits. Under your scenario, they’d retain all deposits and then use them to lend out extra money they some how created.
So people who use debit cards as a way to prevent themselves from spending too much on credit will now switch to credit cards to avoid the debit card fee, thus banks will make money off of the credit card fees for the people who switch. It’s a win-win for the banks.
First of all, switching to a credit card isn’t the only option. Some large banks, like Citibank, are not going to charge the debit card fee, and neither are many (all?) smaller banks and credit unions. Secondly, it is possible to use a credit card without incurring fees. Simply pay it off each month. (If you want, use the credit card and then when you go home, immediately transfer money from your checking account to the credit card. That will effectively be similar to using a debit card.)
No, fractional reserve banking means that the banking system can loan out more than it has in cash. If somebody deposits $1000 in a checking account, that bank (assuming a reserve ratio of 10%) can only load in $900. Now, that $900 will likely be deposited in a bank somewhere, and $810 will be loaned out, etc, etc. However, there’s certainly no guarantee that the $900 will be deposited with the same bank that got the $1000 deposit. The $1000 deposit is only worth a $900 loan to the bank that got the deposit. In aggregate the effect is much greater, but that doesn’t matter to the individual bank.
Sorry. Yes, this is right and my post is wrong. I had the 10x multiplier for the banking system in my head (from a 10% reserve) and confused that with the amount that a single bank could loan out.
All right, don’t call it spite. Just say I don’t make financial decisions based on whether a bank account is right for somebody else I don’t even know. I make it based on my own personal circumstances.
As for someone who will be affected by these new fees – well, as so many people have been saying on this thread, there are plenty of alternatives. Credit unions, other banks, etc. That person should find whatever works best for his or her own situation. I would switch in a second if I were one of them.
As BigT said, it’s not justice or injustice, it’s just business.
Note this article http://www.nytimes.com/2011/10/10/business/banks-brace-for-bad-news-as-earnings-season-arrives.html?_r=1&hp basically says that investors are dumping bank stocks since they no longer perform like bank stocks.
BOA is retreating and going to announce that they will not move forward with the $5 / month debit card fee…for now.
Note that my conclusion is different than yours: just because something is business doesn’t mean the results can’t have ethical considerations. I’m just saying that spite need not enter into it.
I personally would have changed banks over this if I still used BoA and had over $5,000 in my account. And I wouldn’t be changing back just because they’ve changed their minds.
The idea would be to send a message early on that the fees aren’t acceptable to me. Just because they wouldn’t be including me now doesn’t mean they won’t in the future. If it had worked out for BoA, other banks would do it, and I might not have had a choice by then.
I have a BoA account and just got a new debit card in the mail today. There was a lot of information about fees for withdrawing from an ATM (free if it’s a BoA, $2 if it’s another American ATM, $6 if foreign) and about choices on overdrafts, but not a word about the $5 fee. So what gives?
B of A abandoned the $5 fee this week.