Discussion: Really?

First, BofA has two online payment mechanisms - Bill Pay and online transfers. Bill Pay is really intended to pay corporations but can be used to pay anyone; it mails a check if you pay an individual. (I like it - it saves mailing checks and can be set and forgotten for regular recurring payments.) Online transfers are supposed to be electronic within the bank, though I've never tried to use that feature to pay an individual. It sounds like you used the second but it didn't work any differently than the first?

The bigger point that US banking sucks compared to European banking on the retail side is granted, though.

We're apparently not allowed to do things just electronically due to our non resident nature. They're desperate for us to see banking at their worst.

I pay my credit card through bill pay - do they send themselves a cheque?

My larger point is that they do this for free, yet they are considering charging people $5 a month to use their debit card. This seems completely backward.

The point there is that the kind of customers who use debit cards are mostly the kind of customers banks don't really want. Hence the long list of ways to waive that fee if you actually are a profitable customer (eg have a Bank of America mortgage). It's not a fee for service, it's a way of chasing away customers the bank doesn't want while pretending it's a fee for service. And if they make a bit of money on those who don't switch, so much the better for them.

I guess you need to use debit because getting a credit card is nigh on impossible as a recent and temporary arrival?

We have debit cards but only ever use them at ATMs and to buy tickets from European airlines that charge credit card usage fees, so even if we weren't exempt from the fee I can't say it would affect us much.

Atms for me really, I now have a credit card. Rob can't get one yet though.

They aren't charging the $5 fee to use the debit card in ATMs.

So it's just Rob that's going to get stung then.

There is a moral objection though, in that if you're trying to stick on a tight budget then a debit card is by far the best thing for you. Charging someone to do a sensiblw thing with their own cash seems steep. And does that really make you a worse bank customer than someone who runs up a ton of debt on cards, switches balances to other institutions, and may eventually go bankrupt? I genuinely don't know the answer to that question.

I've been doing electronic transfers to any bank back in the UK for about 10 years now, and having to go back to writing cheques and waiting for them to be cashed (my landlord generally cashes our rent cheque over 20 days after I give it to him) is an incredibly frustrating experience.

If you're trying to stick on a tight budget, then you aren't likely to be a very profitable customer. Morality has nothing to do with it. These are profit-making banks, not public services, and they have no universal service obligation in offering deposit accounts. Bank of America is making a strategic decision that it doesn't want such customers.

I don't know if you're aware, but the reason this is coming up now as a problem is that Bank of America used to get about 45 cents per debit card transaction at point-of-sale (paid by the merchant as an interchange fee). Now that fee is being reduced to about 25 cents (capped by the Federal Reserve). Accordingly, offering debit cards is not as profitable any more for its own sake. Credit card interchange fees remain much higher (ballpark is 2% of the transaction with a minimum around 50 cents, with some cards higher - American Express is around 3%). Hence yes, credit card users are likely far more profitable transaction by transaction.

Some would say that having 20 extra days getting the float on the money is a benefit, not a cost. (I understand your point, just pointing out that I'd be delighted if someone systematically didn't cash my checks for 20 days.)

Ah yes. My constant problem with living in modern capitalist society is that I keep expecting things to be fair and ethical. You'd think I'd have grown out of that one by now!

When you're living on a budget like mine, 20 days of money you don't actually have is not a good thing. I like money that isn't mine not to sit around in my non-interest earning account!

So don't use BofA. Find a local credit union.

Yes, this is an option. BofA was just the easiest when I arrived, but there is no obligation at all to stay. Any recommendations, or is local very local?

Here is a list of credit unions in Connecticut. At a glance, they seem to be small-ish, with one or two branches, and may only accept members from their target group (e.g. New Haven firefighters).

I use MIT's credit union, and I have been happy with their services. While they don't have many ATMs, they reimburse members for ATM fees.

Ahh yes the question of ethics, moral obligation/behaviour...

The "good " thing (for banks) about credit cards for people on a tight budget is that they can overspend on what they can pay back, this puts them into the situation of having to pay interest - "yum yum" jolly profitable, even if not good for the "customer" / victim

Credit
The very reason that the world's economy is about to go into meltdown

"spend everybody, spend like there is no tomorrow !"
"Oh shit, its tomorrow"

Banks are absolutely the vehicle, but its the politicians and the regulators that are the architects.

I do believe that Marx said that capitalism is fundamentally self destructive. Greed is what does it.

I don't know if you have schwab banks around you, but they don't charge for the card and they reimburse atm fees which is nice.

Not seen them Neil, but that doesn't mean they don't exist!

Kitch: yup. It's pretty depressing/terrifying for those of us trying to make a career in tomorrow.

THey are mostly online, dunno if they have a branch locally but you can use their card in any atm for free. There are also good things said about the bank on the corner of Grove and Church whose name I can't remember.