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Pay Dirt
A daily look at what we buy, how we spend, and the companies that do right - and wrong - by their customers.

Banking - All posts in category Banking

  • Nov 1, 2011
    12:57 PM ET

    Fee Freedom May Be Short-Lived


    Five bucks a month wasn’t worth the grief. Bank of America backed off plans to charge a fee for the privilege of using its debit cards Tuesday,citing fury from consumers over the new charge.

    The stunning retreat may be a victory for consumers, the Occupy Wall Street protesters who made it one of their many rallying cries, and even President Barack Obama, who openly criticized the measure. But experts warn the banks will search for other ways to make up the 50% reduction in interchange fees merchants pay when purchases are made with debit cards.

    “We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, BofA co-chief operating officer said in a statement explaining the reversal. Pamela Banks, senior policy counsel for Consumers Union, says the move will embolden bank customers. “The public backlash over debit card fees should serve as a big wake up call to banks,” she says.

  • Nov 1, 2011
    9:32 AM ET

    A Program That Rewards Not Spending


    For years, credit cards have been offering rewards to consumers who spend. Now, a new company does just the opposite: it rewards consumers who save. And the prizes are eye popping: a trip to Hawaii, a Toyota Prius, a $50,000 college scholarship. The catch? Good luck getting them.

    Launched today, SaveUp rewards consumers who pay down their debt or put more cash into their bank accounts. Here’s how it works: Consumers link their debts (including credit cards, car and student loans, mortgages etc.) and bank accounts from pretty much any U.S. bank to their SaveUp account. The site automatically awards 1 credit for every dollar saved or every dollar of debt paid off.

    Not only is it encouraging healthy financial behavior, but consumers can rack up rewards points much faster than when they swipe their credit card. Most credit cards give just one to three cents back on every dollar a consumer spends. And there’s no cost to using SaveUp – it’s free to all consumers.

  • Oct 28, 2011
    10:03 AM ET

    Banks Mull ‘Stealth’ Fees


    Given the fallout from Bank of America’s introduction of a $5 monthly charge for the privilege of shopping with a debit card, experts say it’s not surprising other big banks such as J.P. Morgan Chase now insist they won’t be following suit. But rather than eat the lost revenue from the recent 50% reduction in surcharges merchants pay for debit card purchases, some say banks will just find new and creative ways to impose costs on consumers.

    Already this year, banks have made checking more expensive. While 65% of checking accounts last year didn’t have monthly fees, less than half can claim that this year, according to a 2011 study from  And experts say we can expect more than just an increase in monthly checking account charges going forward.  “We’re going to see more creative, stealth-like fees,” says Dennis Moroney, research director at TowerGroup.

  • Oct 25, 2011
    12:55 PM ET

    Credit Card Ads: Trading Privacy for Discounts


    Buy dog food at the pet store today and tomorrow you might see ads online for grooming tools or training classes — if credit card companies are allowed to target consumers based on their purchases.

    MasterCard and Visa are working on plans to market their transaction data to advertisers, according to today’s Wall Street Journal. Currently, targeted ads only reflect browsing behavior and purchases on particular sites, but companies want to be able to sell advertising based on offline transactions as well – a change that is already raising privacy concerns.

    “People don’t like to be tracked by what they buy,” says Linda Sherry, a spokeswoman for consumer advocate Consumer Action. The companies could also hand over enough information that marketers can vary pricing based on number of visits or previous purchases. “That just seems totally unfair,” she says.

  • Oct 21, 2011
    6:00 AM ET

    Let Bank Switchers Keep Account Numbers, Rep. Says

    Until “number portability” was mandated in 2003, many cell phone users felt trapped with a particular wireless carrier, because switching meant giving up the phone number known to all their friends, family, and business associates. That’s how bank customers feel today: as frustrating as debit card fees and other charges may be, switching banks often doesn’t seem worth the hassle of informing business relations of a new account number.

    So why not institute “account number portability” and make the switch from Bank of America to Citi as easy as going from AT&T to Verizon?

    “There’s no good reason not to do that — we should,” Rep. Brad Miller (D-North Carolina) tells Pay Dirt. “The technology is already there – The FDIC already does it whenever they go into failing banks and electronically transfer the accounts to another bank. In fact, the only obstacle to this is that the banks are unwilling to do it.”

  • Oct 19, 2011
    4:14 PM ET

    Customers Want to Switch Banks, But Don’t


    American consumers have a love-hate relationship with their banks. Some 33% customers say they will leave their bank if it introduces higher credit fees, according to a new survey by market consulting firm Trig. And another 43% said they would change their method of payment to either cash (28%) or credit cards (15%). Perhaps more concerning: 14% said they don’t know what they would do or don’t have a debit card.

    However, experts say it will take a lot more than the “Occupy Wall Street” protest or higher debit card fees, like the $5 monthly charge recently introduced by Bank of America, to push people toward credit unions and community banks, says Dennis Moroney, senior analyst at TowerGroup consulting firm. “Only when banks start to lose large numbers of customers will they adjust their prices.”

  • Oct 14, 2011
    11:32 AM ET

    How Higher Retail Sales Could Mean Lower Prices


    Retail sales are up, and though it sounds counterintuitive, that could be good news for bargain hunters this holiday season.

    Looser purse strings mean department stores will have to fight for your dollar and cut their prices, analysts explain. “The combination of high inventory levels and a glum economic outlook could translate to strong discounting on par with what we saw in 2008,” says Jeff Contray, managing editor of

    Retail sales climbed more than expected last month. They were up 1.1% on the month – better than projections that hovered at an increase of 0.8%, according to a Dow Jones Newswires survey. That doesn’t sound like much. However, it’s the clearest signal to retailers that consumers are willing to spend in spite of the weak economic backdrop – just as long as our favorite department stores give us enough incentive to shop.

  • Oct 11, 2011
    12:36 PM ET

    Community Banks Not Ruling Out Debit-Card Fees


    Consumers looking to switch to small community banks and credit unions to escape the newly imposed debit-card fees may want to think twice. While smaller institutions are technically exempt from the new federal regulations which forced Bank of America and others to impose the charges, industry experts say that might not last for long.

    “The smaller institutions have not had to yet – ‘yet’ is the operative word,” says Jason Kratovil, a vice president at the Independent Community Bankers of America.

  • Oct 7, 2011
    5:18 PM ET

    Despite New Fees, Big Banks Do Better Online


    The recent kerfuffle over the $5 debit card charge being rolled out by Bank of America reminded consumers of one of the worst-kept secrets in personal finance: Credit unions and small banks have much lower fees than the major banks. So why aren’t consumers walking away? Even those who campaign against big bank fees say customers have good reasons for staying put: The joys of online banking.

    Web sites at credit unions are genereally less sophisticated than those at the big banks, with many lacking the state-of-the-art systems and money management services that are standard on big bank sites, according to Larry Freed, CEO of online research company Foresee, which carries out an annual online banking study. Instead, the focus is put on more traditional bill payment face-to-face transactions at the expense of online services and ATMs, Linda Sherry, a spokeswoman for the non-profit advocacy group Consumer Action, says. Most the country’s largest banks offer free online banking. “For those who want to bank online that’s a fairly good bargain,” she says.

  • Oct 7, 2011
    11:36 AM ET

    Why a $5 Debit Card Fee Is a Good Thing


    For the past couple of days I have watched in disbelief how everyone has piled onto Bank of America for announcing a $5 monthly fee for debit cards.

    People are swamping the bank with hate. Outraged customers jammed its website.

    The president of the United States denounced the move, which he said was exactly the kind of thing the new consumer watchdog is supposed to prevent – and denied banks have “an inherent right to get a certain amount of profit, if your customers are being mistreated.” On Tuesday, Treasury Secretary Tim Geithner and others piled on too.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.