This week’s CBTV show is entitled, “New Bank Fees Got You Down? Let our Checks and Balances Process Help!”
New federal debit card rules went into effect on October 1st, reducing the fees financial institutions can charge merchants to process each debit card transaction, from an average of 44 cents to 21 cents. Major banks with more than $10 billion dollars in assets have seen the amount of revenue made from debit card transactions, cut in half as a result of these new federal rules. Unfortunately for most Americans, this has forced many banks to find new ways to replace this lost revenue, and they’re looking to you and me to fill the void. Bank of America recently announced it would start charging their depositors a $5 monthly fee to help offset this loss in revenue. As you can imagine, this set off a backlash from customers who are sick and tired of incurring additional fees, especially during these financially trying times. In the face of hard economic times and corporate greed, as demonstrated outside the halls of Wall Street lately, this latest move by some banks to nickel and dime their loyal depositors, is coming to a boil!
Bank of America is the largest financial institution in the U.S., and estimated that the cap on transaction fees would cost it approximately $2 billion dollars annually in lost revenue. Their response was to charge its customers a new monthly fee of $5 for debit card transactions, beginning early next year. An additional $60 per year, per customer would give Bank of America $3 billion dollars a year in new revenue, based on its 57 million depositors, providing the bank with $1 billion dollars more than it was making previously. But Bank of America is not alone. Other major banks such as JPMorgan Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets and Atlanta-based SunTrust bank began charging a $5 monthly fee this past summer.
Some have argued that the government’s overregulation of banks through the Dodd-Frank Act has resulted in banks simply passing along their loss in revenue to consumers. However, losing a significant amount of revenue has given major banks little choice, but to charge extra fees to their customers. Two weeks before revealing the new monthly debit card fee, Bank of America announced plans to cut 30,000 jobs as part of a plan to save $5 billion dollars through 2014, revealing that times are tough for banks as well.
In this current economic climate we find ourselves in, it seems as though we are constantly being nickel and dimed by the companies we do business with. From companies like Bank of America who will soon charge their customers $5.00 a month to use their debit cards, to airlines charging travelers extra money to check their bags, to major consumer goods companies who have down-sized the contents of their product, but still charge the same money, it’s consumers who are ultimately paying the price!
As CBTV celebrates our first year anniversary, we want to remind you that Checks and Balances TV is all about bringing you balanced advice and financial truth, so you can make informed financial decisions. Our Checks and Balances process is designed to give you a balanced perspective on all things financial, to teach you about other options available, and give you both sides to every story, so you can take control of your finances and gain financial freedom. We work very hard to continuously give you the information you need to financially succeed, and we thank you for your support in making CBTV, America’s #1 source for balanced financial advice!
Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!
-Matt
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