A lot of people are up at arms at the news that Bank of America may be implementing a $5 monthly maintenance fee for debit card use. They’re talking about changing banks. On Marketplace yesterday morning, they read a letter from a listener who declared that she would be using her credit card and paying it off every month rather than paying the $5 fee.
On the one hand, I agree with the sentiments. $60 isn’t a negligible amount. Debit cards are less expensive for merchants to accept. If you have bad credit – as I did for many years – the Visa logo on your debit card may be the only way for you to shop any way other than in person.
On the other hand, and for a variety of reasons, I’m a little irritated by these sentiments. We’ve all gotten so used to “free” checking that we’ve forgotten that monthly maintenance fees used to be standard. I worked in banking from 2001-2004, and spent much of that time explaining the suite of fees charged for services ranging from using a foreign ATM to getting your checks back in your statement to transferring money by phone. Cut off times governed by geographic distance restricted when transactions could take place. Need to make a deposit at a branch at 6pm on a Friday to beat a check to the bank? Sorry. We accepted these fees as the cost of convenience and of doing business.
Now, I’m not going to defend the actions of Bank of America or any of the other big banks in this era of rampant financial speculation. They’ve screwed up, and taken our economy down with them. What I am saying, however, is that we’ve been able to take for granted that banking services are free. Opening an account? Free, and in some cases, they’ll GIVE you money as long as you keep the account open. Depositing cash into an ATM without using an envelope? Free. Transferring money using a (free) mobile app from your phone? Free. Talking to someone on the phone? Difficult, but free. Writing checks? Free, though you have to buy the checks. Receiving, viewing, and paying bills online? Free. Withdrawing money from ATMs in any state plus a few foreign countries? Free, as long as you use the right ATM. In the grand scheme of all of the things I’m able to do with my money through my bank, $5 per month in the months that I choose to use my debit card seems pretty minor.
I also understand wanting to keep your money in your community, rather than putting it in a national bank. I did that for a number of years, banking with AMCORE until I moved to a Champaign, more than an hour away from the closest branch or ATM. I loved AMCORE, and would have kept my money there if it had been remotely convenient. I loved it for all the reasons one loves a local business – with the added layer of affection from two and a half years of working there. In 2010, AMCORE was failed by the Fed, and is now part of Harris Bank. I worked for Busey Bank for the first year I was in Champaign, and immediately felt the limitations of having my money at a small town – not even regional – bank. I paid ATM fees at least 50% of the time I needed cash because Busey ATMs weren’t conveniently located in town, much less available out of town. I switched to National City, then we moved to DC, where there were no National City banks. We started using ING, but still couldn’t find ATMs. So, in 2007, we opened a joint account with Bank of America – first to give us an option for depositing cash and checks, then for all of our banking.
So here’s why I’ll be paying the Bank of America debit card fee: the convenience is worth it. It doesn’t make sense to me to change banks over $60 per year. We would pay far more than that in foreign ATM fees if we were to change to the local credit union, for example, considering that we’ve been out of town 12 of the last 20 weekends, and taken day trips 4 of the remaining 8. I don’t have a problem with paying for services I use, and the convenience of using a debit card is FAR GREATER than the cost.