While today’s announcement that Bank of America is dropping its plan charge a monthly debit card fee, and that other big banks have similarly scrapped their fees, could be dubbed a victory for consumers, it’s only a small triumph, and one that has people wondering what the banks will do next.
“Banks will still have to find ways to increase charges and drive profits,” says Odysseas Papadimitriou of CardHub.com to SmartMoney.
Some of the ideas already in the works include increased checking account charges, inactivity fees on unused debit cards, charges for paper statements, and higher penalties for bounced checks.
And even free debit cards have their disadvantages. As we’ve previously reported, banks are dropping debit card reward programs. Plus, the cards offer fewer protections than credit cards in cases of fraud or theft. Shoppers might still be better off using cash or credit, or even a prepaid card, which also helps build your credit rating.
So even if these now-dropped fees were a prime motivation for you to consider switching to another bank, you should still shop around to see what’s available elsewhere in terms of a more consumer-friendly credit union… before the next round of fees/charges/penalties swings around.
Fee Freedom May Be Short-lived [SmartMoney.com]