Dick Durbin’s amendment to cap fees on debit card transactions to 23 cents has led Visa to charge the maximum fee for every transaction, but only for small retailers who have no clout:
Before the Durbin Amendment, a one-store coffeeshop might pay a 7-cent fee on a $2 cup of coffee and a 35-cent fee on a $20 group order. Durbin hoped to cap the latter fee at 23 cents, and leave the first unaffected: a ceiling, not a guideline. Instead, that $2 coffee may now come with a 22-cent interchange fee, an increase of over 200%, which will result in higher prices for consumers. Visa and MasterCard’s actions ensure that, far from paying lower interchange fees, small merchants will actually face much higher costs than before.
A lot of independent retailers already have signs urging customers to pay with cash instead of cards, because little shops pay top dollar for credit card interchange. I assume that a lot of them will just stop accepting debit cards if banks can take more than 10% off the top of a small transaction.
A few months ago, I moved my banking to USAA. USAA doesn’t have ATMs, so they reimburse me for ATM fees. Since they limit the number of withdrawals they reimburse, I’ve been taking out more money at every ATM trip, and I carry a lot more cash. I like it, because paying cash is easier and faster than using a credit card, especially with the rinky-dink point-of-sale machines that a lot of retailers use.
It’s a tiny action in the scheme of things, but if you want to send a little fuck you to Wall Street, move your money to a locally-owned bank or credit union (or USAA) that won’t charge you $5 to have a debit card, and start paying cash at all the small local shops.
Raven (formerly stuckinred)
I have almost all my accounts with USAA except checking which I do with a local bank. How will these rules impact debit card purchases?
mistermix
@Raven (formerly stuckinred): The rules don’t impact you directly, they impact the retailer who takes debit cards. I assume the impact on you will be higher prices and/or refusal to accept debit cards.
Raven (formerly stuckinred)
Duh, read the article:
cleek
and then wait for it to be gobbled up…
we’ve switched banks three times in the past 10 years: involuntarily. our banks keep getting eaten by bigger banks .
barath
I generally use cash when at small / local businesses because I don’t want the credit card companies taking a cut. Maybe this will also lead to such businesses dropping acceptance of credit cards? (That’d be great, because it’d both mean that they’d keep more of their earnings and also people buying in cash wouldn’t be subsidizing those using cards.)
Halcyan
I think we all ought to either use cash or write checks. Let’s let the banks figure out that they would prefer we use their debit cards to they having to process all of the hand written checks.
arguingwithsignposts
@cleek:
Credit unions.
ETA: I left BofA several years ago, and have been very satisfied with the credit union experience. I like to think of it as my tiny FU to all the big banks.
Ben Cisco (mobile)
Second the USAA recommendation. They are nothing short of outstanding.
Special Ed
I just ended my 17 year relationship with Wells Fargo over the $3 debit card fee.
I switched to Space Coast Credit Union here in Florida. My way of supporting the Occupy movement. Kinda feels like getting a divorce.
Insomniac
USAA. Simply excellent.
Loviatar
@arguingwithsignposts:
Be careful with Credit Unions, mine charges a 5 dollar inactive fee if there is no activity in the account for a quarter.
I had to close my 10 year old son’s saving account because we were basically only depositing birthday checks once a year and he was getting dinged for 5 dollars 3 out of the 4 quarters every year.
That said I still don’t have any regrets. In fact I closed my BoA accounts at the beginning of the year and transferred all my banking to my credit union.
Fuck the banks, Fuck the bankers and Fuck all their defenders and yes that includes Charles “Direct Deposit” Schumer.
Raven (formerly stuckinred)
Can’t you beat the USSA 10 ATM withdrawal limit by getting cash with a purchase?
stacie
Mistermix, thanks for the reminder about USAA banking. I’ve been trying to find a local credit union whose criteria I meet, and for some reason they all serve communities leading right up to the boundary of my neighborhood or county.
USAA has provided auto insurance to me for my entire driving life, great rates on auto loans, and made car buying really, really easy when I bought my first new car some years back.
Today’s payday, so I’ll get the account set up today and bid Wells Fargo farewell by the end of the month.
arguingwithsignposts
@Loviatar: I guess YMMV. I knew some charged on checking accounts that were inactive, but not savings accounts.
Keith
Banks can’t coerce businesses to stop taking cash, can they? That’d be *real* fucked up.
Turbulence
There’s a restaurant near where I work that set up an ATM inside a few months ago with a sign saying: “We were spending $6000 per month on credit/debit card fees but if you use this no-fee ATM, we don’t have to pay anything”. I’m sure they have to pay a monthly fee for the machine and they’ve got to keep it full of cash, but they must be saving a ton of money.
WereBear
I don’t like carrying cash, but I’ll do it if need be. Lots of places in my small town already don’t accept cards. I’m sure there will be more.
I also hope that people will no longer be in the mood to just put up with the banks with they are being this way. I’ve banked locally for the past ten years and I have no love for the big banks.
Belafon (formerly anonevent)
Talk about shooting themselves in the foot. I hate carrying cash, in part because I am never near an ATM, and in part because when my wife sees money she thinks it’s to spend. I’ll have to figure out something to do, though. I guess this is why I am seeing a lot of the convenience stores around here requiring a $3 minimum purchase with a debit card.
Raven (formerly stuckinred)
@Keith: My credit is so bad they won’t take my cash!
russell
My wife and I have all of our banking with a local bank. By “local” I mean I don’t think it has any branches outside of eastern MA. By “all of our banking” I mean personal checking and savings, my wife’s business accounts, a HELOC, and a household checking account. If we have any issue, question, or problem, we find somebody to talk to that we know by name, and the problem is fixed. They’re excellent.
I also have a credit card and a savings account at a credit union. I pay a reasonable but not bottom-dollar interest rate on the card, and I have no hassles.
No individual retail customer is a big enough fish for the big banks to give a crap about. They will gladly f**k you over for a dime.
Do not give them your money.
Rafer Janders
Cash is far more expensive for banks to process than debit cards — this will come back to bite them in the ass.
CarolDuhart
Merchant Cards, anyone? Some people remember when stores used to issue their own store cards. Perhaps we will get to that again, where several small businesses band together to issue some sort of pre-paid card you could use when buying from them. Don’t forget things like gift certificates and money orders as well….
Raven (formerly stuckinred)
I pay for my coffee by credit card month-by-month at our morning joynt.
Rihilism
I second both the advantages and cautions of credit unions. My credit union reimburses ATM fees for other banks but requires you use the debit card as a credit card a certain number of times at a certain amount in order to obtain the reimbursement. I believe, though I am not certain, that this saves the CU from the VISA fees but passes the fees onto to vendors instead.
Also, not all CUs are averse to attempts at deregulation in order to make more money.
Still, given the choices, I would still go with a local bank or CU if only to give a big FU to the BofA and Citibanks of this world. Thank you, though, Mistermix for the USAA info. A friend of mine recently suggested the “carry more cash” method to me and I think I need to give this another looksee…
Belafon (formerly anonevent)
@Raven (formerly stuckinred): That would be another one: Are we going to see tabs come back? Or could I receive a bill from certain places that I could pay every month? Or every pay period, which for me is every two weeks?
arguingwithsignposts
@Belafon (formerly anonevent): Layaways are coming back at WalMart, IIRC.
Raven (formerly stuckinred)
@Belafon (formerly anonevent): There are places in Athens that do that. The Grit, famous veggie joint, has a meal plan thing that saves a couple of bucks.
Belafon (formerly anonevent)
@arguingwithsignposts: Toys R Us, KMart (if you can find one), and yes, I believe WalMart as well.
jibeaux
I don’t love paying for things in cash, although I try not to run any card purchases under $10, because I like to track where my money goes and it takes more dedication to do that with cash, but I have been thinking of doing it more. I once was chatting with a woman who owned an independent bookstore who told me that what she pays in card fees every year could hire another full-time staffer with benefits. When put that way…
Raven (formerly stuckinred)
@Rihilism: The Kansas City Roll will make a comeback!
cleek
@Special Ed:
do you call it the “Space Ghost Credit Union” ?
because i would be completely unable to do otherwise.
jwb
@Halcyan: There are merchant costs associated with checks (either the merchant gets dinged when customers pass bad checks or they have to pay to have the check verified; I seem to recall that they also have to pay to clear checks above a certain number); and even with cash (bills and change have to be sorted by employee or they have to pay bank to do so). Those costs are certainly considerably lower than the charges on these small transactions and probably lower than the previous fee, but it helps explain why merchants were willing to pay the lower fee (besides the fact that so many people use credit/debit cards).
singfoom
Another satisfied USAA member here. My only complaint is that they have a PAC and they lobby and mostly fund Republicans.
vernon
I’ve spent the past few years amazed that anyone still does business with the big banks. Our public baffles me. They can get righteously worked up over a modest price increase from Netflix, to the point of essentially controlling the policy of something THAT DOESN’T FUCKING MATTER, yet they continue banking with piranhas like Citi and B of A. We should have smashed their windows and burned them down long ago, let alone taken the obvious course of putting our money elsewhere.
Thomas
I’ve been using USAA for auto and homeowners insurance from the start. I used to get annoyed by the pitches they would occasionally send me to transfer my entire “banking experience” to them. When I read WellsFargo was “testing” the debit card fee, not to mention that they charge $2.50 for every non-WF atm transaction (on top of what the ATM’s owner charges –i.e. $4 – $6 total fees for every ATM w/drawal, unless I go out of my way to get to a WF branch).
I opened my USAA checking last week, and I’m in the process of moving my mortgage and car loan auto-debits over.
By the way: USAA’a limit on reimbursable ATM transactions is 10/month and a total of $15 in refunded other-bank fees. I don’t know how everyone else operates, but I generally don’t hit the ATM more than 4 or 5 times per month, so I will stay well withing these limits.
arguingwithsignposts
@jwb:
Bills are also easier to walk off with, whether by store employees or intruders.
dave
All my accounts are with local credit unions and i use cash as much as possible. I save the debit card for Walmart and other national chains.
Cacti
Once again, I’m happy to share my anecdote of why I don’t keep my money in large corporate banks:
My wife and I were briefly without a checking account, and she had started a new job. We went to cash her first check at Bank of America, the institution from which it was drawn.
We were told by the chirpy teller that we had the “option” of opening a new checking account w/ BoA, or we would have to pay a $6 fee for them to honor the piece of paper with their institution’s name on it.
So, we paid the $6, told them hell would freeze over before we ever banked with BoA, and opened an account with a credit union shortly thereafter.
Comrade Dread
No offense, but maybe Dick shouldn’t have relied on the good will of Visa and Mastercard not to stick it to SBOs.
Gopher2b
I never carry cash, and never will. Debit cards are so much faster. If I have to wait in line behind five people paying in cash, I won’t shop there. It’s slow and annoying. Durbin can blame himself for this cluster$&@?.
Cacti
@Gopher2b:
This would be a perfect entry for whitewhine.com
To be fair though, mine probably would too.
ET
The credit companies have been so successful with getting people to use their cards for everything people use them to buy a $3 cup of coffee or a $6 value meal. Until big business who have high volume but at low purchase price like Charbuck’s and McDonald’s, stop taking cards the big credit companies won’t care.
Gopher2b
Cacti: My complaints are small and petty, but they’re mine. :)
catclub
@Comrade Dread: “No offense, but maybe Dick shouldn’t have relied on the good will of Visa and Mastercard not to stick it to SBOs.”
This is what happens when there are GOP zombies shrieking about overregulation. Durbin puts in one rule and does NOT institute an entire new bureaucracy to monitor debit card fees.
This way is better because the fees are explicit and you can work around them because you know what they are. People will complain either way.
Steeplejack
USAA has at least some ATMs. One popped up recently in the CVS near me. But I’m sure it’s because I am in the heart of military-industrial-complex country (suburban Virginia outside D.C.) and they have a lot of customers here.
Anyway, as Thomas noted above, they reimburse for transaction fees at other ATMs, up to 10 transactions and $15 in fees per month, and that’s not onerous at all. I can’t remember the last time I went to anybody’s ATM. When I need money I just do the “cash back” thing at the supermarket. (But my supermarket is very convenient, and I’m in there multiple times a week.)
I am in the process of moving my accounts to USAA this month and cutting the cord to Bank of America. I ended up with BofA by default after the waves of bank mergers: C&S National Bank (an old Atlanta bank) > NationsBank > BankAmerica > Bank of America. (Heh. I misstyped “Bank of Amerika,” and I kind of like it.)
Lizzy L
I’ve been banking with BofA for nearly two decades, and I have a mortgage with them, which probably means I won’t get dinged $5 a month on my account for using my debit card. Not sure of that, as they haven’t actually sent me any letters.
Nevertheless, the day BofA announced that fee, I opened an account with a local credit union. Their only requirement is that one make 3 transactions per month (deposit, debit, credit card use, withdrawal, online bill pay) through the account. I don’t anticipate having a problem meeting that requirement.
I should have done it years ago.
From Both Sides
My wife and I recently transferred most of our banking to the credit union of the university I work at. Talk about better service. Far fewer fees, lower monetary amounts on the fees there are, and far more human in how they deal with things. We had an accidental overdraft when a check was presented early and payday was one day later. The big boys would’ve sent back the check unpaid and whacked us with a $35 fee. The CU? Paid the check, let us know a problem had come up, and assessed only $5. The fact they cleared that check was well worth the $5 – they knew we were good for it, and as a result they’ve got our loyalty.
burnspbesq
@vernon:
Chase is convenient, the service is good enough, and they’ve waived a lot of fees for us. Any other questions?
D. Mason
I’ve been using a small local bank for years now, they are always friendly and know me by name. When I have to use a foreign ATM they reimburse the fees and deposits post to my account almost immediately – even after 2pm. Oh, and no banking fees for anything so far. I have nothing but great things to say about my bank, they are tiny with few branches but it never hindered my ability to transact.
SiubhanDuinne
@Steeplejack:
Steep, my very first “grown-up” checking account was with C&S (Citizens & Southern), in 1962, back when Mills B. Lane Jr. was still very active. It was a terrific bank in those days and I returned to C&S out of old loyalties when I moved back to Atlanta in 1984. But the Bank of Amerika :-) and NationsBank years were progressively awful, so I switched to Wachovia. SIGH. I mean Wells Fargo . . . .
Pongo
I have two sisters who worked for USAA in Phoenix. Excellent? Outstanding? I guess. Unless you find it objectionable to have grown, educated people need to RAISE THEIR HANDS for a bathroom break and think it’s wrong to fire people when they have a bona fide medical emergency (child in ICU with inexplicable heart failure) for exceeding their 1 day a month personal leave policy. They have to be the most abusive, backward corporate employers I have heard of in decades–but, hey, at least you get free checking!
Xenos
@burnspbesq: Large banks cut a lot of slack with favored customers.
Right now I am using a special Citibank account that is subsidized by an employer. Free transfers, international wires, personal customer service guy down in Florida who we know by name and who we can call up and harass if we want to. From our little corner of the plutonomy you can see how the system bends to accommodate those with connections. And this is small potatoes, really, compared to the big perks that the financial industry sets aside for insiders.
vernon
@burnspbesq:
Just one: Do you have any principles at all? JP Morgan Chase is among the very worst of the big banks; their indulgence in bid-rigging, hedging against pension-fund clients, and predatory restructuring that’s bankrupted entire municipalities (see the Jefferson County sewer case) is far worse than the casual gouging of account holders you’ve somehow managed to avoid. They’ve posted record profits while sending truckloads of honest people to the poorhouse.
But hey, if Chase is convenient for you, why worry about any of that? “I got mines; yall can fuk yerselfs” … Hey, I bet there’s a Chase ATM in Galt’s Gulch! Another plus!
catclub
@Xenos: “you can see how the system bends to accommodate those with connections.”
The greatest health care system in the world worked for Herman Cain because he called up T Boone Pickens to help him get a fast appointment and treatment at the Anderson Clinic in Houston. (Pickens was a large donor to Anderson and personl acquaintance of Cain) Unemployed single mothers also do that ALL THE TIME, and the system works!
Ahh a Lion
If Durbin’s desire was to screw up the transaction processing business by price fixing it, he has succeeded. Now the people most affected are the small shops and debit card users with low overall balances.
Great work dipshit.
different-church-lady
Jesus H. Hornblower, what part of $2 coffee = CASH is so damn hard for bullheaded plastic addicts to grasp?
This is the kind of thing I’ve been saying on numerous threads: we sign up for abuse by big institutions. You want Visa to stop gouging? Then stop inviting Visa to be involved with your every purchase! It’s not rocket surgery.
different-church-lady
@Keith:
They don’t have to coerce businesses — the customers are already volunteering for that kind of credit card company vision of utopia. (See #40 for proof.)
cckids
@jwb: There are even bank fees on businesses to get cash; we have a friend who owns 3 coffee/donut shops in S. Nevada; earlier this year he told us he spends close to $8000 per month to get & deposit cash/change from the bank!!! I was just dumbstruck by the amount. Isn’t that what the bank is FOR?
A Ghost To Most
Not sure if anyone made this clear, but this applies only to debit cards, not credit cards.
gaz
@burnspbesq: Chase was horrible to me. They made me jump through 3 billion hoops simply to *deposit* money in my spouse’s account (we were just married at the time). The only reason we were with Chase is we ended up with them by default after WaMu went under.
And the tellers at at least one Branch in our state are overtly racist – (where a friend of ours lives)
http://www.dailykos.com/story/2011/07/07/992259/-Chase-Bank-Racist-Jerks
So, that’s more than enough for me.
I’ve considered USAA, but for now we are banking with USBank, who has always been friendly, has many locations, never engaged in subprime lending (they are a bit more conservative WRT to loaning than most banks, even in the 90’s before most banks got drunk on subprime). Consequently they never took a dime of bailout money.
I’d considered USAA, but do they offer merchant services?
gaz
@cckids: USBank charges my business account 7cents a month I think, for the services that I have.
I’ve never been dinged for accepting a client’s check, or using my business bank card. I don’t pull cash with it though, so I don’t know how that works.
My personal account has no fees.
Your friend my want to switch banks. Not sure what’s up with those fees. =O
Jay S
@gaz: You might look at Credit Unions as well. BECU and Watermark/Sound CU now have business accounts. I don’t know what they have for merchant services like cash counting or dealing in large volumes of checks. I was surprised to see them offer business checking, years ago I had to look around for a bank that offered that and not all of them did.
Bill Jones
I’ve never used a debit card. Cash for small purchases, credit card for anything over $10 and pay it off every month so no interest costs. I don’t understand the attraction of debit cards – why use the dang things in the first place? I’d rather be floated a free loan from the cc companies.
Jay S
@Jay S:
Ah, the Credit Unions I mentioned didn’t say anything about debit/credit card processing either, so you’d probably need a third party for that. I know Costco is always advertising there credit card processing for small business, but I don’t know how competitive that is or how it would be affected the VISA/Mastercard threat.
burnspbesq
@vernon:
Who the fuck are you?
Since you know exactly nothing about my political activities or my contribution history, you have no standing to lecture me about anything.
Take your sanctimony and shove it up your ass.
ETA: I’m now a Chase customer for life. Just because it pisses you off. That worked out well for your side, didn’t it?
gaz
@Jay S: All the credit unions in my area outsource much of their processing to larger “clearinghouses” … basically bank backoffice for hire.
The most prolific local credit union in my area doesn’t even handle their own debit cards – they give you a branded card that’s wholly operated by some 3rd party. *And* (at least in this one’s CU’s case – they are notorious for fouling up their bookeeping and screwing up peoples banking)
And the service at BECU sucks, in my experience. It’s one of the reasons I do not use them anymore.
That’s not an indictment of all credit unions, but given my options, USBank is my best option where I am at (and yes I think about who I bank with).
As I said, I’ve considered USAA but I’ll have to open an account with them for awhile and see how it goes. It’s encouraging that everyone I know who uses them seems to like them, but for the most part I also here mostly raves for BECU (who I had a less than stellar experience with).
meh.
The service is awesome at USBank (in my experience, it has always been stellar)
but –
Should anyone give me a decent reason why – on an ethical level – that I shouldn’t bank with USBank, I’m open to considering it. I like my bank to be ethical, regardless of it’s size.
That said, I’m very happy with where I’m at. The only way I’d be happier is if I had a local CU that would meet my needs – and that just isn’t available where I’m at.
beergoggles
I am in the process of moving all my money to Ally bank. It used to be GMAC. Best interest rates I can find – way better than any of the credit unions I can join, and unlimited ATM transaction re-imbursements. I am adding a few CDs as well – staggering their maturity so that each is separated by a few months. Also I don’t see them funding republicans on opensecrets.org the way I see USAA doing it.
gaz
@Bill Jones: I for one, always liked how easy it was for me to use my monthly statements to keep track of my spending. I’m too lazy =) to do a paper ledger religiously.
That tends to be why I prefer debit cards – over cash OR checks. However, if my bank starts tacking on a ton of additional fees, I may abandon them myself. I honestly am not sure what my bank’s position on these fees is yet – I suppose I could ask, but nothing has changed so far w/ my bank that has caught my attention… yet.
PanAmerican
Well, no actually.
Scott P.
I’ve already mainly moved to the cashless economy. It’s so stupid to have to carry around bills. I rarely do except for the handful of instances (laundry, barber) where it is still necessary. I don’t want to hurt small merchants, but dammit, why can’t we get an electronic method that doesn’t screw them over?
Darkrose
@Bill Jones: Because not all of us are good with credit cards.
I got into some deep debt when I started carrying a balance on my card. I always figured I’d pay it off the next month. Sometimes I did. Sometimes I didn’t. It was hard for me to think of it as “real money”.
I use my debit card because I don’t have to wander around with large quantities of cash, but I know exactly where the money’s coming from and I can plan accordingly.
JillS
I admit to not having read all 71 comments before this… but here’s my question anyway:
What if we all went back to using cash? The small businesses would make an extra 23¢ per transaction (I’m good with that) and the big companies would lose millions of transaction fees. Oh, and we’d probably incur less debt because we wouldn’t be pulling out our plastic AND our kids might actually see money trading hands (and learn to make change, etc)
wholly realistic? maybe not, but I think I might try it for all of my local purchases.
Monala
@gaz: You, too? I also have had a negative experience with BECU and a positive one with US Bank. (And I haven’t heard anything in the news about US Bank screwing over its customers in any way — have you?).
I recently opened an account with America’s Credit Union, which is affiliated with the Army, after meeting a rep at a community fair. Yet I am reluctant to transfer all my banking to that account yet, due to my negative BECU/positive US Bank experiences.
different-church-lady
@burnspbesq:
Im’a wonder… just how much of your life do you run on this kind of principle?
gaz
@Monala: As far as USBank screwing people? I’ve heard nothing on an individual level – I did do some digging after my comments about USBank’s and subprimes.
What I said was “mostly” true, as it happens, they did in theory participate in the subprime markets through indirect means, but didn’t seriously engage in pushing subprime loans, so I was basically correct there, based on teh google.
and I guess they did take some bailout money, which they dispersed and repaid by Jan of 2009…
http://projects.propublica.org/bailout/entities/494-u-s-bancorp
mea culpa… still, I’d say, it doesn’t appear as though my taxdollars were spent keeping them afloat (although we arguably loaned them some tax revenue in the short term, based on the above)…
All that said, again, I have never heard any complaints from any individual account holders that I’ve met personally. I imagine complaints would probably be the fact that they are pretty tight on their lending practices – always have been, from what I hear (more power to them, imo)
I can’t make that no-negative feedback claim for BECU, esp since I myself have had trouble with them. I know many others who moved away from them as well.
gaz
june 2009, not january… arg
gaz
@burnspbesq: You know what pisses me off burnspbesq? suicide. it gets my goat, every time.
vernon
@burnspbesq: @burnspbesq:
I know from other threads that you’re a prick (& thanks for so amply confirming it here).
pattyp
Question for those with USAA checking accounts – have you ever used their free interbank transfer service to move funds to/from other banks? My partner and I have a joint BofA account because he travels a lot for his job and needs a way to send money to me. He already has his own BofA account and it’s super easy for him to just move money from his to ours. But if it’s easy and free to use USAA’s interbank transfer, I’m going to try to convince him to switch. Thanks!