No one likes to pay for something they’re accustomed to getting for free. So, quite predictably, Bank of America customers are angry that using a debit card will soon cost them $5 a month. While consumers are outraged with the idea of adding a monthly fee for a service that they’ve come to expect for free, one group is downright giddy that big banks are piling on fees for debit card usage and other standard banking services.
We speak not of Bank of America shareholders welcoming the new monthly debit card revenue stream, nor of Citi executives looking ahead to a rise in profits from new fees and balance requirements in customer checking accounts. No, the group that is probably happiest to see all of these new charges is the subset of financial institutions that, compared to the fee-crazed big banks, look better and better every day to consumers: small banks, credit unions, and online banks.
However onerous and unfair the new fees may seem, there’s a simple way to avoid them. A Bankrate post put it this way:
The new fees can’t harm you at all if you simply choose not to bank with institutions that charge them.
The USA Today editorial page said much the same thing:
So what power do aggrieved bank customers have to respond? They can take their business elsewhere.
And where will they take their business? Obviously, to financial institutions that aren’t charging all kinds of outrageous and unnecessary fees. Plenty of bank customers are doing just this right now.
According to DailyFinance, online banks are booming in the aftermath of new fees being added by Bank of America and others. PerkStreet Financial, an online-only bank with no-fee checking and debit cards that aren’t only free but offer 2% cash rewards as well, has been blessed with double the usual number of new customer signups this week.
Meanwhile, small banks and credit unions all over the country have launched advertising campaigns highlighting that, unlike some big banks, they don’t charge for things like checking accounts and debit card usage. One bank in Texas has even begun paying customers 15¢ each time they swipe their debit cards.
The National Association of Federal Credit Unions (NAFCU) is also stressing how credit unions compare favorably to the big banks, with fewer (or no) fees and lower (or no) minimum balance requirements. It’s no coincidence that traffic at NAFCU’s credit union locator site has surged 200% the week after Bank of America’s announcement regarding debit card fees.
The big banks are free to add all the fees that regulators will allow. Customers are also free to take their business elsewhere.