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Is Bank Of America Taking Advantage Of The Unemployed With Debit Card Fees?

Amanda Miller — Thu, 10 Nov 2011 20:13:54 +0000

The state of South Carolina and Bank of America have teamed up together to administer unemployment benefits to South Carolina residents. Unemployment benefits used to come in the form of a check but are now being issued in the form of a Bank of America prepaid debit card.

Bank of America claims that it’s good deal for everyone from taxpayers to those receiving unemployment benefits. In fact, by utilizing the use of prepaid debit cards, The South Carolina Department of Employment and Workforce expects to save around $5 million annually without printing and mailing checks.

According to a Pew Research Center report from last fall about 1/10 of all South Carolina households did not have a bank account – Source. With this knowledge the State’s Department of Employment figures issuing the prepaid cards are a great way for families that do not have a bank account to avoid paying fees for cashing their benefit checks.

While the State had good intentions in mind they, along with bank partner Bank of America, are getting some bad press over this decision. While Bank of America (BoA) has the largest number of ATMs across the country, many living in rural areas without a BoA ATM or branch, are incurring massive fees when withdrawing money from their prepaid cards.

You see, as a Bank of America customer I can attest to this. If I withdrawal money from a non-Bank of America ATM I will usually have to accept charges from the bank of a $3.00 fee. My statement will then show an extra $2.00 from Bank of America for using an ATM outside of the bank. In total if I withdrawal money I can expect to have an extra $5 taken out of my account in fees. This is what the corporate world likes to call a “convenience” fee.

Residents of South Carolina that do not have a Bank of America branch or ATM in their general area are getting all too familiar with these fees and are in an uproar over the new prepaid system and many are experiencing a $1.50 “convenience” fee with these debit cards.

South Carolina is not the first state to make an accord with Bank of America in regards to prepaid cards paying out unemployment benefits; California and New Jersey have been working with the bank for months. In fact, in May the National Consumer Law Center named Bank of America’s prepaid cards “the best in the nation.” However, “unemployed card holders in those states don’t face the same list of potential fees that exist in South Carolina. One example: California and New Jersey’s contracts allow card users to conduct a limited number of free transactions at other banks’ ATMs” – Source.

When South Carolina learned of the options that are offered to those in other states the state asked Bank of America for changes and in July those unemployed were given unlimited free withdrawals at ATMS and one free withdrawal from any bank teller where the VISA logo is displayed per week.

However, this doesn’t help people that may need to make multiple withdrawals within a week. I read one article that seemed to point blame at Bank of America for this situation but I think both the state of South Carolina and the bank should be scrutinized on an even playing field. The state is the one that put this into effect and knew the terms and conditions with Bank of America that would be placed upon residents.

In August 2010, unemployment officials summoned [Sandra] Gortman for a benefits review during which she says she was strongly encouraged to sign up for a prepaid debit card. Gortman resisted. Fearful that the agency would delay her benefits if she did not submit, she says, Gortman signed the form. A few weeks later the card and a brochure came in the mail. The potential fees were disclosed in the fine print, she says, but she initially missed them – Source.

What are your thoughts on this matter? I feel like so many fingers are being pointed in so many directions on who is to blame for this? How would YOU fix this situation? Leave a comment below!!

As always, folks, be sure to read the fine print of anything you willingly opt into – even your government unemployment benefits!

Bank of America To Charge Monthly $5 Fee For Using Debit Cards

Amanda Miller — Fri, 30 Sep 2011 20:51:23 +0000

From How to Get Out of Debt

I’m not sure if I’ve mentioned this before but I, Amanda Miller, am a Bank of America customer. Although, not a thrilled and loyal customer, I’m a customer nevertheless. In fact, this bank has done some things over the years I’m not very happy about but I continue to bank with them because I love their mobile application (Yes, I bank with them strictly because I love their iPhone app).

However, Bank of America got my blood boiling today when I learned that they are planning to charge millions of us customers a $5 monthly fee for using our debit cards.

Since new government regulations cap what banks can charge merchants for debit transactions they feel the implementation of the monthly card fee will help recoup it’s revenue that will be lost due to the new regulation. The new regulation of “swipe fees” is expected to cost U.S. banks around $6.6 billion a year. To offset this loss many banks will be charging a debit card fee, adding monthly fees to checking accounts, raising minimum balance requirements to avoid certain fees and are scaling back reward programs.

Bank of America expects to lose about $2 billion in revenue annually all on it’s own so it’s making a hasty decision with this large charge in monthly debit card fees. It appears other big banks (Chase and Wells Fargo) will be introducing fees as well but not as high as $5. Some of those living in Nevada, Washington, Oregon, New Mexico and Georgia should expect to see a $3 charge for debit card purchases made starting October 14, 2011 if you bank with Wells Fargo. As of right now Wells Fargo is just testing the program, not implementing it across the board.

The fee will be charged monthly if one’s card is used in a debit transaction but not if it’s used at an ATM to withdrawal cash.

“The economics of offering a debit card have changed with recent regulations,” a spokeswoman for Bank of America said Thursday. – Source.

According to memo within the company Bank of America customers will have until early next year until fees come into play. Which is plenty of time to see what other banks will be doing and if it would be wise to use another bank if you’ll be shopping with a debit card most of the time. However, other big banks are expected to follow this trend.

Keith Writes in And Wants To Know “Should I Consider Debt Consolidation For a Fee?”

Steve Rhode — Wed, 09 Jun 2010 17:49:22 +0000

From How to Get Out of Debt

Keith

“I have $30,000 in credit card debt plus $160,000 in home loans and business loans. Should I consider debt consolidation from a company that charges me a fee each month?”

Keith,

Excellent question and my answer may surprise you, Yes!

Nonprofit credit counseling programs brag that many of them are free or at a low cost, but that comes at a price, namely who they really represent. As long as the credit counseling program is getting paid by the creditor, there is no monthly charge to you who do they truly represent?

Let’s look at this a different way, if you were suing your credit card company and they offered you one of their free lawyers that they were paying for, do you think you’d get impartial representation, or would you want to use your own lawyer that you knew was working for you?

A debt management or debt consolidation company that charges a fee should not be avoided if you are comfortable working with them, they are providing you with excellent customer services, they are kind and treat you with respect.

At a time like this you don’t need to be a number in line at the free clinic, you need to get top-notch kind and compassionate assistance to help you through this. Fee charging debt management or debt consolidation programs should not be solely judged on if they charge a fee, but the quality of the service and representation they offer you.

Big Hug!

@GetOutOfDebtGuy

How to Get Out of Debt With the Get Out of Debt Guy » fee

Is Bank Of America Taking Advantage Of The Unemployed With Debit Card Fees?

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Bank of America To Charge Monthly $5 Fee For Using Debit Cards

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Keith Writes in And Wants To Know “Should I Consider Debt Consolidation For a Fee?”

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