Since the passage of the Oct. 1 Durbin Amendment, which reduces about half of the amount retailers have to pay banks for debit card swipe fees, banks have been trying to make up for this lost revenue. Early next year, Bank of America will be enacting a $5 a month surcharge to debit card users. Other banks are still testing out monthly fees.
To put it simply, this change is detrimental to college students.
Many larger banks will only be charging the monthly fee to members whose checking balance is under $1,500. It is unfair to enact a surcharge on those who have less money in these accounts. And though some banks will exempt people who are signed up for direct deposit for their paychecks, a good deal of students don’t have time for a job while carrying as many units as they can to graduate in four years.
Groups such as moveyourmoneyproject.org – whose slogan is “Invest in Main Street, Not Wall Street” – are leading a national movement encouraging people to move their money from their bank accounts to credit unions. These unions are cooperative institutions owned and controlled by their members.
Although it would seem wise to remove one’s money from banks with the new fees, there are clear downsides to doing this. For college students, switching one’s place of residence often – going from school to home – makes it difficult to put one’s money in a credit union when there are a lot fewer union locations, making it harder to access one’s money than it is when working with major banks.
Banks can take advantage of their customers as they know the difficulty associated with moving one’s money around and that most students will have to stick with a bank – as most don’t know how their interest rates would change when switching over to credit unions.
As it is, it’s difficult for students to deal with money. As a digitalized culture, debit cards are an important form of quick payment. It would be unreasonable for people to abandon debit cards completely, even with the new costs. Swiping one’s card is easier than going to a bank or ATM to get cash out, or writing an archaic check.
Though some students might consider switching from Bank of America to other banks, it seems likely that most banks will have to start a similar fee system. Before you think about taking your money and running from your bank, consider the negative effects of doing so.