The ATM Debit-card fee is transparent and easy to understand. This is far preferable to the spate of fees (such as overdraft insurance charges) that were opaque and confounding. If Bank of America wants to charge for a service, they should be free to do so.
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They are free to do so.
Customers and investors are equally free to give BoA the one-finger salute, in response, too.
And it's not an ATM fee (they've already said it won't apply to ATM transactions).
My theory is that this is a way to get rid of unprofitable accounts. My understanding is that they are only charging the fee on accounts that don't already get most fees waived, and I expect the people most motivated to avoid a $5 fee are either relatively impoverished or relative skinflints: exactly the people they don't want as customers.
In any case, as you say, it is much more transparent than the old way, and makes it much easier for customers to decide if they want to take their business elsewhere. I hear Wells Fargo is looking at at $3 fee. My guess is that community banks won't charge a fee at all.
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I think the question is "who uses the cards as debit cards?". There really are not any advantage to using a debit card over a credit card, unless you cant get a credit card. So this a fee applied to there low income customers. its the way of the world, rather than trying to add value so you can get more revenue from the rich, the poor who have less choices get nickled and dimed ($5/month is actually a lot to the poor, so I predict a backlash and loss of customers).
Yes this is less obaque than the overdraft fees, but still. Luckily there is some market competition. And when the economy gets better, perhaps the banks will actually want to have depositors...
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