Bank of America announces $5 monthly penalty for debit card use

Bank of Amer­i­ca Bank of Greed, one of the largest finan­cial insti­tu­tions in the world, announced today that it will begin charg­ing cus­tomers who use a deb­it card tied to their check­ing account a $5 month­ly penal­ty. (BofA is call­ing it a fee, but of course it’s real­ly a penal­ty). BofA is plan­ning to intro­duce the penal­ty ear­ly next year.

Just a few weeks ago, Bank of Amer­i­ca alert­ed cus­tomers in Wash­ing­ton and Ida­ho by U.S. Mail that it was impos­ing new terms and con­di­tions for its finan­cial “prod­ucts”, includ­ing check­ing and sav­ings accounts.

Under the new terms, month­ly fees are the norm unless cus­tomers take action to pre­vent them from being collected.

Wells Far­go and Chase are also “test­ing” deb­it card penal­ties on unlucky cus­tomers in cer­tain areas, though nei­ther of those banks has con­firmed that such penal­ties will become part of their nation­wide policies.

One rea­son Wall Street banks are look­ing for ways to extract more of their depos­i­tors’ mon­ey is because a new reg­u­la­tion is going into effect that caps the fees that they can charge mer­chants for pro­cess­ing trans­ac­tions made with a deb­it cards. Since banks have lost some of their pow­er over mer­chants as a result of this reg­u­la­tion, they’re lean­ing on their depos­i­tors to make up the difference.

Although Wall Street banks are among the biggest, most pow­er­ful cor­po­ra­tions on the plan­et, there is no law that says any of us have to keep our mon­ey with them. We at NPI strong­ly urge all of our read­ers to go ban­k­less and join a cred­it union if you haven’t already. Cred­it unions offer ben­e­fits banks sim­ply can’t match, like bet­ter rates, low­er fees, and supe­ri­or service.

Since cred­it unions are owned by their mem­bers, there are no out­side stock­hold­ers to pay. All prof­its get returned to members.

The Pacif­ic North­west is home to many fine cred­it unions. Some cred­it unions have very few restric­tions on mem­ber­ship; BECU, Water­mark, and Qual­star are open to any­one who lives and works in the Ever­green State, for instance.