With Bank of America’s $5 debit card fee kicking in for 2012, you have three options to avoid them…
First of all, you may want to freshen up on the difference between an ATM and debit card transaction.
- ATM transactions always require a PIN.
- Debit transactions are those without a PIN, processed like a credit card (and hence why you select “credit” after you swipe your card).
Your Bank of America debit card can function as both. When you go to a BofA ATM and withdraw cash or make a deposit, that is an ATM transaction. However if you use it at a store for a purchase and select “credit” it’s processed over the Visa payment network like a Visa credit card.
You won’t be charged the $5 fee if you only use your card for transactions at Bank of America ATMs. However, as soon as you start using it elsewhere, you may be subject to the new $5 monthly debit card fee (regardless of whether you press “debit” or “credit” during payment).
So you want to know how to avoid the debit card fee from BofA? Well here are three strategies you may want to consider:
#1. Stop making debit card purchases
The simplest way is to use your card for nothing more than deposits and withdrawals at Bank of America ATMs. If you’re accustomed to using your card for purchases, switch to cash, credit cards, or checks.
However credit cards aren’t for everyone. Sure, myself and many others love them because we like to milk the rewards and benefits. But if they cause you to overspend, then you should cross them off as an alternate option.
Checks on the other hand cost money for both account types, plus they are not always the most convenient and time-efficient method for many types of purchases.
That leaves us with cash. Good if you manage it properly. Bad if it gets lost or stolen.
#2. Dump Bank of America
If you feel debit (versus the alternatives) is still the best for your budgeting, then it might be time to break up with Bank of America.
There are plenty of free online checking accounts and credit unions out there which give you which offer free debit card transactions. Will it be a hassle to switch everything over and re-enter all your online bill payments? Yep. But think how much you will be saving…
- $5/month x 12 = $60 savings per year
- $60 x 5 years = $300 savings over 5 years
Is saving that much money worth the hassle of switching? You be the judge.
#3. Get rich
Okay, this obviously isn’t a very feasible solution, but for amusement sake it’s worth noting that so called “premium customers” which are those high net worth individuals with multiple accounts, will avoid Bank of America’s debit card fee.
But for all the rest of us which are not considered “premium,” we will be stuck with the $5 monthly charge. So I guess the other solution is to win the lotto jackpot if you want to avoid their debit card fee!