A $5 fee for using your own bank debit card?

**Epaphras** · 10-11-2011, 08:34 AM

I use my local credit union for many reasons:
- It can't be sold to a big bank because it's member-owned.
- More of the money recirculates locally than with a national/multinational bank.
- I know they make more sound lending and investing decisions (i.e. less insurance to account for risk = lower overall cost) because they do face-to-face lending and investing and don't depend on a three-digit credit score.
- I currently enjoy free checking that earns 4% after meeting a few conditions (use auto-deposit, use automatic bill-pay, use debit card 10 times a month, and access online banking 3 times a month).

This is how I do my own protest of Wall Street. If people cut up their credit cards with these banks and paid off their debts (credit card, auto, and mortgages) and pulled their savings and checking accounts and put that into a local bank or credit union, that would make a true impact on these banks, not a pointless demonstration.

**Fandrew** · 10-11-2011, 08:35 AM

I tried putting my money in a local bank. It just doesn't work too well with traveling to college and Nashville and such. Currently, I'm with BancorpSouth (Regional Bank), and I'm on a first name basis with everyone at my local branch. I really would hate to move my bank, but if they pulled something like this, I would.

Heck, I got mad that my paper statement was charging me $2 a month. They never told me ahead of time I could get an online statement that was free. I fixed that as soon as I figured it out.

bobthecockroach · 10-11-2011, 08:42 AM

I just can't keep reading this thread without thinking...

Going to the bank and making a withdrawal, like people had to do for years before the invention of ATMs and debit cards, is still free. The reason banks charge new fees is because they're providing new services. I appreciate that my bank has no fees, but I also appreciate all the value they add over what banks used to be. I don't see why I should *expect* to get something for nothing.

normajean777 · 10-11-2011, 08:55 AM

Quote:

Originally Posted by bobthecockroach

I just can't keep reading this thread without thinking...

Going to the bank and making a withdrawal, like people had to do for years before the invention of ATMs and debit cards, is still free. The reason banks charge new fees is because they're providing new services. I appreciate that my bank has no fees, but I also appreciate all the value they add over what banks used to be. I don't see why I should *expect* to get something for nothing.

Agreed. Businesses still accept cash, but people have stopped liking to carry cash I suppose. I however carry a nice thick money clip on me at all times. Its liberating to pay for things with cash.

bobthecockroach · 10-11-2011, 08:59 AM

And actually, any time you pay for something with a card, you're paying a fee anyway, because card companies charge businesses fees to accept the card and that results in higher prices to you.

jthomas1600 · 10-11-2011, 09:01 AM

Quote:

Originally Posted by bobthecockroach

I just can't keep reading this thread without thinking...

Going to the bank and making a withdrawal, like people had to do for years before the invention of ATMs and debit cards, is still free. The reason banks charge new fees is because they're providing new services. I appreciate that my bank has no fees, but I also appreciate all the value they add over what banks used to be. I don't see why I should *expect* to get something for nothing.

I can't help but think though that the more we use automated services the less it should cost the bank. So why are we charged a fee for things that should actually be saving them money? Simply because they can? They used to charge the merchants for ATM transactions, but now because of banking reforms they can't do that....so they are passing it on to us.

bobthecockroach · 10-11-2011, 09:35 AM

Quote:

Originally Posted by jthomas1600

I can't help but think though that the more we use automated services the less it should cost the bank. So why are we charged a fee for things that should actually be saving them money? Simply because they can? They used to charge the merchants for ATM transactions, but now because of banking reforms they can't do that....so they are passing it on to us.

It seems unlikely to me that maintaining all the necessary infrastructure to support ATMs is cheaper than a few extra tellers. The bank has to pay for ATM machines, or pay to allow their customers to use other's ATM machines. The bank has to pay a company to make the cards. The bank has to have IT infrastructure to keep track of all the data for the cards. For debit cards, they have to contract with Mastercard or Visa usually to support processing, that must cost the bank money. Debit and ATM cards mean a bank needs more people in fraud protection, it's a lot harder to fraudulent withdraw money in person.

I just don't see any way an ATM/debit card could save the bank money. The only thing it might do is allow them to hire fewer tellers, but then they just have to hire extra IT guys, which are more expensive anyway.

jthomas1600 · 10-11-2011, 09:42 AM

Quote:

Originally Posted by bobthecockroach

It seems unlikely to me that maintaining all the necessary infrastructure to support ATMs is cheaper than a few extra tellers. The bank has to pay for ATM machines, or pay to allow their customers to use other's ATM machines. The bank has to pay a company to make the cards. The bank has to have IT infrastructure to keep track of all the data for the cards. For debit cards, they have to contract with Mastercard or Visa usually to support processing, that must cost the bank money. Debit and ATM cards mean a bank needs more people in fraud protection, it's a lot harder to fraudulent withdraw money in person.

I just don't see any way an ATM/debit card could save the bank money. The only thing it might do is allow them to hire fewer tellers, but then they just have to hire extra IT guys, which are more expensive anyway.

You could be right. But I'm thinking it's not just the extra tellers to dispense cash to costumers. I don't think most people use their cards primarily to get cash. I'm thinking of the dozens of checks that people used to write every month that they no longer do. New tires? Debit card. Big dinner out? Debit card. Back to school shopping? Debit card. Groceries every week? Debit card. It seems to me that electronic money transfer is so streamlined as compared to using checks or even cash. There are actually some bills that cost you to pay online. I don't understand that. It's cheaper or easier for me to send a check for you to process as opposed to...bam, the money is in your account?

bobthecockroach · 10-11-2011, 09:49 AM

Quote:

Originally Posted by jthomas1600

You could be right. But I'm thinking it's not just the extra tellers to dispense cash to costumers. I don't think most people use their cards primarily to get cash. I'm thinking of the dozens of checks that people used to write every month that they no longer do. New tires? Debit card. Big dinner out? Debit card. Back to school shopping? Debit card. Groceries every week? Debit card. It seems to me that electronic money transfer is so streamlined as compared to using checks or even cash. There are actually some bills that cost you to pay online. I don't understand that. It's cheaper or easier for me to send a check for you to process as opposed to...bam, the money is in your account?

Businesses have to pay to process cards, and not just a token amount. I've looked into payment processing, and with a well-known new-and-improved player in the market, the fee for small transactions will amount to 5-10% of your revenue regardless of volume. That's why some small businesses (esp. restaurants) go cash-only.

As for checks, didn't you have to pay for those too?

I'm not saying I have any answers here... just that banks, in my mind, have gotten many times more convenient than they have more expensive.

**Epaphras** · 10-11-2011, 10:22 AM

Quote:

Originally Posted by bobthecockroach

That's why some small businesses (esp. restaurants) go cash-only.

Or limit debit card/credit card transactions to at least $10.

I try to use cash at local merchants to save them the bank fee. I feel no qualms about it anywhere else

Bryan · 10-11-2011, 10:24 AM

Quote:

Originally Posted by Stealth3si

Indeed.

As in this?

Could you briefly summarize in a way how this is so?

USAA is not a corporation and there are no shareholders. Profits from the year are split between retaining some for business investment and a return to members. So each year I get a portion of the profits returned to me in a "Subscribers Savings Account" at the end of the year a portion of that is paid back to me in cash. When and if I leave USAA i'll receive the total amount in my SSA about 6 months after I leave (or to my estate, since i'll be a member until I die.)