Business

After Abandoning Debit Card Fee Banks Look Elsewhere to Raise Money

Banks have been looking for ways to generate cash to make up for the “billions of dollars in revenue that is expected to vanish as a result of new restrictions on credit cards, debit cards and overdraft policies.”

The ill-fated debit card fee was a massive flop and so they’ve been forced to look elsewhere.

What else could they possibly charge?

Here are some of the different money raising methods that some banks are planning on using (as bullet pointed by Business Insider):

  • Bank of America is charging $5 to replace a lost debit card, and $20 if you want rushed delivery.
  • U.S. Bank Corp. is charging $0.50 for checks deposited via mobile phone.
  • Incoming domestic wire transfers will cost #15 at TD Bank starting in December.
  • Bank of America raised the fee to use a MyAccess checking account by more than $3 a month earlier this year.
  • Citigroup upped the monthly fee to use its basic account from $8 to $10 a month.
  • Chase raised the fee to monthly use its basic checking account to $12.

Remember when it was reported earlier on The Blaze that Bank of America (among others), in the face of fierce criticism, decided to drop its much-maligned $5 debit card fee?

When that article was published, it pointed out that:

“Banks have been adding charges in an attempt to make up for billions of dollars in revenue that is expected to vanish as a result of new restrictions on credit cards, debit cards and overdraft policies. A provision in last year’s Dodd-Frank financial-overhaul law halved the amount that banks can charge merchants for accepting debit cards.”

At the time the Blaze article was written, it’s author noted that, “Generally, when revenues are sinking, a business will raise its rates to make up the difference.” Obviously.

“However, as in Bank of America’s case, if customer dissatisfaction is great enough, the business will have to find a different method for generating capital,” the article added.

This was followed by a question:

…if Bank of America plans to make up for that “billions of dollars in revenue” that vanished with new restrictions, and they found out the hard way that they cannot just impose card fees, how do they plan on raising the money?

It appears that the banks that tried (and dropped) the debit card fee strategy were asking themselves the exact same question.

And now it looks as if they have found other ways to charge customers. However, these newest capital-generating solutions may prove to be infinitely more unpopular than the debit card fee.

A final thought: the nationwide ‘banxodus’ was born from customer dissatisfaction over the debit card fees. One can only guess how customers will react to the banks latest initiatives.

Comments (21)

  • USANUMBERONE
    Posted on November 17, 2011 at 2:41am

    They another bailout

    Report Post »  
  • alwayshappy
    Posted on November 16, 2011 at 3:19pm

    Quite honestly the banks scare me and I am looking elsewhre to invest my savings. I don’t trust the banks or anything they tell me. They are fat cats and we are being used! The interest that Bank of Amercia pays on my savings account is a SIN! So I am looking elsewhere. At age 70 I simply cannot count on them anymore.

    Report Post »  
  • Eyeball
    Posted on November 16, 2011 at 10:42am

    The banks should be free to do whatever they wish. The government needs to butt their regulations out. The market will reward those banks who are favorable to it‘s members and punish those banks with bankruptcy for those who gouge it’s members.

    Report Post » Eyeball  
  • samadamsvoice
    Posted on November 15, 2011 at 4:19pm

    The Democrats in Congress think you are too stupid to realize that they changed the law on transaction fees. They hope that you don‘t realize that banks don’t need deposits to make loans, they use Fed loans. Consumer accounts are just too costly to make much money for the bank.

    Report Post »  
  • NoLongerNonPlussed
    Posted on November 15, 2011 at 12:56pm

    Banks too big to fail? NOT!
    Banks too big to do business with? Hellyes!
    TEA!

    Report Post » NoLongerNonPlussed  
  • MrKnowItAll
    Posted on November 15, 2011 at 12:30pm

    I’m glad my Dad was Polish. Learned how to not use Banks very early in Life. Gamble it all away. Thanks Dad.

    Report Post » MrKnowItAll  
  • qzak491
    Posted on November 15, 2011 at 11:39am

    I think each bank should be audited to see if they need more money. The whole idea of the protesters is the banks have all the money already, If this is true they don’t need money, if this is not true get rid of the protesters, they have nothing to protest.

    Report Post »  
  • lukerw
    Posted on November 15, 2011 at 11:30am

    Banks are just Business… where their Service is their Product. If you do not like the Product… then choose an alternative. Do your homework… and stop trying to look up their dress!

    Report Post » lukerw  
    • Ruler4You
      Posted on November 15, 2011 at 11:42am

      Some how I’m not buying it. The whole idea for having ATMs was to get rid of costly ‘manpower’ so Banks could increase their profit margins. Well, they did that. Service suffered for a while, but we all got used to the new way Banks wanted to do business.

      Now, banks don’t want to allow you access to cash. At least, not readily. And checking accounts are beginning to come under similar pressure. I’m beginning to wonder what good banks are? I’m sure this is all tied to the “e-money” scheme they have been knocking around for the last few years.

      You’d think with all of the (redistributed wealth) money that obama paid to banks they’d be able to get by for a while.

      Report Post » Ruler4You  
  • WakeUp
    Posted on November 15, 2011 at 10:52am

    Instead of trying to raise more money, why not cut costs? The easiest way is to cancel the cards of anyone that doesn’t pay their bills.

    Report Post »  
  • AlaskaismyEden
    Posted on November 15, 2011 at 1:40am

    Wells Fargo posts record profits… I can’t even figure out how they charge me for my checking account! Charges for excessive numbers of deposits or too much cash (are you kidding me???), writing more than just a few checks, anything to nickel and dime you to death. Being in a small town, this is our only bank. Closed my business account and went to a neighboring town with more banks, and got FREE checking. Moved my personal account, and got an INTEREST-BEARING checking account. Locally, I use CASH, so I guess the government will be looking at me as a possible “terrorist”…. after all, cash is suspect these days, right?

    Why aren’t people/businesses content to make a good living? It seems like everyone wants to be nothing but filthy rich… shallow, shallow goals. How pitiful.

    Report Post »  
    • Taquoshi
      Posted on November 15, 2011 at 9:11am

      Wells Fargo is the old Union Trust, which bought out Wachovia, because their UT reputation was so bad. Then they promptly ran the Wachovia reputation into the ground. So, nothing they do really surprises me.

      BoA bought out Fleet (as in enema) and continued their poor accounting practices. You are 100% correct in your actions to find a bank that actually believes in customer service. The banks use your money as collateral when they make loans, so you should earn some interest. They’ve all gotten stuck on this “I’m providing you with a service.” idea, when in truth and fact, we as depositors are providing them with the funds to run their business.

      Report Post » Taquoshi  
    • WakeUp
      Posted on November 15, 2011 at 10:57am

      The real question is why do people do business with them? Why not go to a community bank or credit union?

      Report Post »  
  • Snowleopard {gallery of cat folks}
    Posted on November 14, 2011 at 10:56pm

    As the fees change around, look for another set of Congressional Democrat sponsored regulations to come down the line; one of these times it will include hidden in it the part of where the Fed’s gain total control over them and absorb them into a national bank again.

    Report Post » Snowleopard {gallery of cat folks}  
  • Psychosis
    Posted on November 14, 2011 at 10:54pm

    thanks a lot you meddling politicians for screwing the little guy

    all problems can find blame in government

    Report Post » Psychosis  
    • sunnydecoy
      Posted on November 15, 2011 at 7:09pm

      you were paying the fee before. The stores raised the price to cover the transaction costs. Now the banks are letting you know how much they made off those fees.

      Report Post »  
  • Skrewedretiree
    Posted on November 14, 2011 at 10:30pm

    Once Bank of America accepted the TARP bailout, my once “valued customer” classification changed. Our bank card went from around 7.5% to 20+%. I cashed out bonds and paid it off. Our safe deposit box (large size) went from an already high $75.00 per annum to $150.00 per annum. We closed the box. Along with that we closed my and my wife’s credit card accounts. It took several months and a threat of a lawsuit after three attempts to close my wife’s credit card accout before the act was done. We transferred everything to a local credit union we had been with on the side for 30 years, making them our primary bank.

    If the major banks are looking to raise revenue, I have one good piece of advice: STOP SCREWING YOUR GOOD, SOLVENT AND BILL PAYING CUSTOMERS!
    I doubt they will listen, though….I seem to remember Congress bailing out the Savings and Loans at taxpayer expence back in the late 80s or early 90s, and after the Obamanation Regime bailout at taxpayer expense, does one really expect “Change We Can Believe In”?

    Report Post » Skrewedretiree  
    • Taquoshi
      Posted on November 15, 2011 at 9:14am

      Oh, yeah. I’m right with you. It took me almost three months to finally close out one credit card and almost a month for them to accept my husbands POA for my mother in law’s checking account (she’s 92 and in frail condition at a local nursing home). FINALLY managed to move the accounts to a local credit union, but it took much more work than it should have.

      Report Post » Taquoshi  
  • Buggs
    Posted on November 14, 2011 at 10:18pm

    Think of all the free bank services we could still be enjoying if the federal government had kept out of fixing prices

    Report Post »  
    • CatB
      Posted on November 14, 2011 at 11:18pm

      NO kidding … my 5/3 checking account now charges $2.00 per month just for copies of checks printed in your monthly statement .. I told them that is why I have duplicate checks (no need for the copies) so don’t print them .. then I have “savings” that they were paying .10 % on .. 1/10th of one percent .. are you kidding me!

      Report Post »  
    • Brooke Lorren
      Posted on November 15, 2011 at 1:56am

      I’ll be leaving Chase bank by the end of the month in order to avoid their fees. I already have accounts at two credit unions; I’ll just open another account.

      Report Post »  

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