In the face of mounting pressure from consumer advocates, customers, legislators, and an angry media, five megabanks have all of a sudden decided that charging people for access to their own money wasn’t such a good idea, after all. The moves by Wells Fargo, Chase, SunTrust, Regions and Bank of America to cancel plans to charge debit card users monthly fees is a clear victory for their customers. However, before you chalk one up for the vocal majorit,y you might want to keep your eyes on your mailbox for announcements of future fees.
It’s unlikely that the mega-banks are simply going to give up efforts to increase their fee-based income. Keep in mind why these same companies - only one week ago - were steaming full- speed ahead with their plans to charge fees for debit card usage. The root cause for the new fees was the cap on debit card swipe income, which is still in place.
Nothing has changed relative to the income they’re going to lose by not being able to charge more than $.21 for a debit card swipe. What has changed is how they’re likely going to get it from us.
What Comes Next
The banks clearly underestimated how consumers were going to react when they found out they were going to get charged for access to their own money. I’m still not sure how that happened considering there are thousands of people camping out this very evening in cities all over the country protesting, among other things, how big banks treat customers. Do they not know that debit card users LOVE their debit cards? I used the word LOVE, people.
The banks will likely take advantage of this little diversion. They’ve lost this battle but they will not lose the war. An increase in fees (one that’s less offensive) is likely to occur. This will probably include some blending of increased late fees, ATM fees, foreign transaction fees, or some other fee that we’re less likely to notice.
This move by the banks is little more than a stay of execution. What it does do for consumers is buy them time to move their business from one bank to another, without the pressure of impending fees. Moving a checking account is a royal pain. I know, because I just went through the process myself.
If you’re one of the many consumers who feel like this was the straw that broke the camel’s back, then you should open a new checking account with either a credit union or a bank that does not charge you excessive fees. Stick a few bucks in the account, order your debit card and paper checks, if you’re still using them. Then, start the process of moving your direct deposit to the new account and converting any auto-debit merchants to the new account. Once you’re done, you can claim victory a second time for forgiving…but not forgetting what happened over the past month.
John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a contributor for the National Foundation for Credit Counseling. He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. Follow John on Twitter.