Reader Gary used his Bank of America credit card to pay $2 on a parking meter in Washington, DC. Bank of America treated it as a cash advance and slapped him with a $10 fee, as well as a higher APR. When Gary called to complain, he learned that it wasn’t an error: Bank of America has started treating payments to parking meters as cash advances and may even treat all payments to government entities as cash advances.
For the unfamiliar, multispace meters, also called “Pay and Display” machines, are a central machine where drivers can purchase time on a particular space or print out a ticket to display on their dashboards; most machines accept bills and credit/debit cards, allowing drivers without quarters to purchase parking. Obviously, a $10 service charge negates this convenience.
Gary writes:
I recently used my bank of America credit card to pay for a multi-space parking meter in Washington DC. The type electronic meter common in urban areas for parking on the street and which accepts credit card payments. The charge for parking was $2. Bank of America treats this charge as a cash advance. They charged me a $10 cash advance fee on top. So now I will be thinking twice before using any bank of America cards. A transaction that should cost $2 can come out costing $12. Also, my card currently has a 0% promotional APR on purchases, but they put the $2 parking purchase in a separate category subject to a much higher interest rate.
Gary sent us a follow-up the next day:
I spoke to their CSR twice and I never really got an adequate explanation. I am attaching a copy of the email explanation they sent me. From what I understood, they now treat payments to government entities as quasi-cash transactions. During my last conversation the CSR explained that parking meters and payments of fines would now be treated as quasi-cash transactions subject to a minimum fee of $10. I think this is something new that they recently introduced and I have requested an updated version of my terms of service to get a better understanding of these fees.
(Photo: dM.nyc™)
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F!@# BoA…that is just stupid.
I read these and wonder what my bank has up it’s sleeves. Maybe time to swtich to a credit union before it’s too late.
Basically.. if you spend under $10 on those “quasi-cash” transactions, they add $10 to the original price?
blame the OP for using BoA (kidding) or blame BoA for being sneaky linguists?
I can’t imagine that Visa/MC would endorse this re-interpretation of what constitutes a cash advance. I look forward to the Comcast/BoA showdown in the finals of this year’s worst company contest.
@vgerik1234: it would appear the fee you incur is a minimum of $10, and it can go up based on the amount spent
I don’t know it that’s the best picture ever posted on Consumerist, but it is the most ironically relevant picture to the story posted I’ve ever seen.
FYI – Here is a link to BoA’s policy on Cash Advance fees.
[www.bankofamerica.com]
I don’t see the part about parking meters or government entities.
How in the hell does this differ from any other purchase made on my credit card? You are purchasing a service: parking. Not asking “mother may I have $2.” EVERY purchase would be a cash advance, if you follow this twisted non-logic!
How do you get a cash advance if you don’t end up with any physical CASH in your hand? That’s a load of BS. I hope BoA doesn’t get away with this.
Everyone needs to get away from Bank credit cards ASAP. It really is a no brainer, Banks are trying to make money, Credit Unions are, Not for Profit. You do the math!
Everyone has at least a state credit union they can belong to. You typicaly just need $5 in a credit union account to qualify.
Truly the scummiest company in America, and maybe the entire world.
Well BofA, you can now kiss any future credit card transactions from me goodbye.
Can you imagine paying $12 for a burnt cup of Starbucks swill? Jeesh………
They do this because gov’t entities (for the most part) don’t pay the normal merchant fees for accepting these types of payments. So BofA is looking for a way to recoup their cost.
Still scummy.
It’s stupid, but I’ll bet the problem is that the meters process the charge as an ATM transaction rather than a credit purchase and BofAss can’t tell the difference (and doesn’t want to).
I’m not defending BOA, but don’t all transactions with gov. (i.e. parking tickets) get processed as a cash advance b/c the gov. doesn’t pay the credit card processing fees like private companies do.
@Landru: It wasn’t worth mentioning in the post because they took it down and only a cached version remains, but until a few days ago, Cambridge, MA had this on their parking/tickets page:
@SadSam:
I was going to suggest that too. For example, there is no way the post office is paying the normal CC fees on your miniscule stamp purchase. However this is the first report of a bank socking you with a ridiculous cash advance fee for paying a govt-related purchase with your credit card.
Hmmm – I wonder if you could do a chargeback on the $10 Fee?
I wonder if this applies for my government issued BOA credit card.
Soon they’ll be treating cash advance fees, finance charges, etc. as cash advances too.
This nickel-and-diming fee crap needs to stop. It almost seems like B of A is going out of their way to piss off (and lose) all of their customers. As one of their customers they lost a year ago, it truly boggles my mind.
@SadSam: Yeah, I’m guessing this has to do with how the transaction is coded as far as the merchant category. It still doesn’t make sense to charge a $10 cash-advance fee for it, when the cost of processing it is minimal. It’s not a cash-advance, so it shouldn’t be subject to those terms. If they don’t like that, they should make a separate category for government entities.
Okay, time to throw BoA into the blacklist…
@xay: The irony of that possibility blows my mind.
@Alex Chasick: I wonder why they took it down. Do you think BOA is that intent on keeping their fees hidden that they complained to the town? It’s hardly going to be top-secret info when you see the $10 charge on your account.
If these aren’t PIN-based transactions, how can they be cash advances? The only way I can get cash on any of my non-BOA cards is either (a) use a PIN, or (b) go to any bank and ask for a cash advance (and sign for it).
Well, that settles it for me. I just finished moving all my money from BofA to my credit union account. I’ll wait for the transaction to take place and then I’m calling and canceling my account with them (once it’s $0.00, of course!)
@SadSam: I think you’re probably right, though I just charged something (on a Chase Visa) at the DC DMV, and it went through as a normal charge.
@BlondeGrlz: I think it’s more likely that the town took it down because it was cutting into the town’s revenue from people paying their fines. People might be more likely to pay their fines in a timely manner if they can use a credit card.
@balthisar: It can be a cash advance even if it’s processed in some other way (ie, as credit, or via a convenience check). It mostly just matters where the transaction originates. For example, most banks will treat “cash equivalent” purchases, like chips at a casino, as cash advances. That kind of makes sense, in a way, because they want to discourage people from using that as a loophole to just take money out of their credit line (since you could sell the casino chips or whatever for real cash). But it seems just stupid for a bank to treat a parking meter transaction as a cash advance…it’s not a cash equivalent, and it’s clearly a purchase.
@balthisar: Not quite. Purchasing cash equivalents on a credit card (e.g. casino chips) counts as a cash advance.
@SadSam: DING DING DING!!! That’s exactly right.
Why doesn’t the government ban credit card fees instead of just weaseling their way out of them and allowing all other businesses to be screwed? Percentage based credit card fees are a business tax and they need to be made illegal.
That has to be the most incredibly perfect picture I have seen here.
@Concerned_Citizen: Well…I can see both sides of that argument. You’re right that most of the time a $2 transaction costs the credit card companies the same amount to process as a $10,000 transaction. So in that sense a flat fee would be more fair. But there is also the liability risk and greater exposure to fraud associated with large transactions. The credit card-issuing bank might be risking more of their own money, if it’s a fraudulent transaction, by processing a larger transaction. (I understand that some of that liability gets pushed onto merchants, but it’s not supposed to be if they follow proper record-keeping procedures). So in that sense I can see why a percentage-based fee might make sense. But doubtless the interchange percentage fees charged to merchants are excessively high. No argument from me there – that’s pure profit for the credit card companies.
I’m getting charged $3 fees every month by BofA and I don’t know why. I’m going to call and complain soon – and then leave them!
Who (with Arizona branches) should I turn to? Is Wells Fargo or Chase ok?
@straight_up: Did you call and ask them? If it’s a checking account, it’s probably for not meeting a minimum balance or direct deposit requirement or something. They do have checking accounts that don’t require those things.
This can’t be that hard of a thing for them to fix… I have Wells Fargo, and I use my card all the time to pay at parking meters. I’ve never incurred any type of fee outside of the $1-$2 payment for parking. (I just double checked my charge from this past weekend)
Call Tyson Price in the Executive Office. His number is 480.225.1310.
@straight_up: Something is seriously screwed up with the Consumerist comment system lately. This makes two windbag comments of mine that it has just eaten.
Summary:
-Credit Unions good
-Loosely linked with Armed Forces better
-Redstone Federal Credit Union even better
-$3 fee for emergency transfer from savings on zero balance debits. Only $3 now because when free everyone was filling their savings and emptying checking to get the higher savings interest rate.
-Me = relieved to be banking with the good guys when I see posts like this.
Okay… weird…
I refreshed and my original comment appeared in the comment box…
@straight_up: Find an loosely Armed Forces affiliated credit union (or maybe any credit union since I’m speaking from anecdotal experience). I’ve been with Redstone Federal Credit Union since my paper route at 12 yrs. old (16 years ago) and they have free, no-hidden-fee checking and I’ve yet to see them so much as suggest that they might allow transactions past a zero total account balance.
I say “total account balance” because they do charge a $3 emergency transfer fee to transfer from one’s savings when a Debit Card transaction brings the Checking past zero. They always snail mail a notice for this. I wouldn’t be surprised if they’d email, but I’ve never given them my email address. They used to do the emergency transfers for free, but I think they were upset with how that encouraged people to keep all their money in savings (to get the higher interest rate).
They’ve never been anything but helpful within their legal abilities. (I.e., at one point in this messed up state [AL], it apparently became illegal remove a secondary name from your bank account without their consent. That’s been fixed very recently. My paper route account still had my brothers and father on it until about a month ago. It’s a pain to go around and get notarized signatures from family members who work… and I’m too lazy to be bothered to.)
Everytime I see posts like these about all the non-credit-union banks out there, I get a big sigh of relief that I was blessed to be working with the good guys.
This is the stupidest thing i’ve ever heard.. BOA should be sued for this..
How do these people sleep at night seriously whoever made this up?
Amazing picture!
@johnva: I haven’t asked yet. My understanding is, I have a student account, and shouldn’t be subjected to those fees.
Bank of America should really go for a corporate name change. Just imagine:
BoO – Bank of Opportunists. How fitting (TM).
@ab12: Agreed. Excellent picture choice Alex!
@straight_up, johnva: Actually, a recent Consumerist article mentioned about how even if the customer is meeting those basic requirements, BoA still charges the customer as if those requirements haven’t been met!
I call them Bank of Fees.
@azntg: Only when people’s accounts were set up in some incorrect way. They don’t do that to me, and never have. The only thing I’ve seen them do to me that I considered somewhat shady was that they automatically “upgraded” my account type to one that had a minimum balance requirement (and some additional features, like interest-bearing) when I left significantly more than that minimum balance in my free checking account for a long time. I complained and they immediately switched it back (they said they do that as a “courtesy”, but it could result in people paying fees if they decide they don’t want to keep so much money in there anymore).
Satan’s Bank. If they don’t make the finals of worst company of the year, the process is broken IMHO.
@johnva: You’re being a little too nice to BoA with how you described that “courtesy.” That’s just fraudulent of them to do things like that. I’m so glad I just closed my accounts with them.
@scottywz: I’m not being “nice”. I said it was a little shady. But like I said, I tend to pay attention to my accounts and I noticed it right away. And they didn’t argue with me or give me trouble when I asked to have it changed back. So it wasn’t that big of a deal.