Poll: Customers Ready To Switch Banks Over Debit Card Fees

After Bank of America announced it would impose a $5 monthly charge on customers who used debit cards to make purchases, it touched off a widespread consumer backlash. Many consumers vowed to switch banks.

But how many actually will? No one knows, but a research firm, Research Intelligence Group, of Ft. Washington, Pa., says it conducted a survey and found that about 30 percent of U.S. bank customers say they will switch banks if their present bank adopts the debit card fee.

According to the survey, some 43 percent said they would start paying for purchases with cash or credit cards rather than pay the fee. About 13 percent said they would pay the fee if it were “reasonable.”

Making up the difference

Bank of America announced the fee as a response to new rules that reduce the fee they can charge merchants each time a consumer uses their debit card to make a purchase. Bank of America's fee, which goes into effect early next year, is designed to make up virtually all the money the bank stands to lose under the lower “swipe” fee.

Kathleen, of Pineville, N.C., is a Bank of America customer who says she plans to find an alternative because of the new fee.

“I will be protesting and withdrawing my cash and putting it in a jar at home,” Kathleen told ConsumerAffairs.com. “Sounds like the panic of 1929. Sounds like another recession. They are nickeling and dimeing my account more every month. I urge every BofA account holder to do the same.”

Lavanda, of Mineola, Tex., wrote to Bank of America expressing her anger at the new fee, and sent ConsumerAffairs.com the response she said she received from the bank, which says in part “We certainly understand your concerns regarding debit card monthly fee of $5.00. Please note that from time to time, all banks, including Bank of America, review their pricing for products and services across the franchise. Factors considered include market forces, as well as the value of the products and services, to help ensure that the pricing reflects both the value and the costs associated with providing these products and services.”

Learning from Bank of America?

Other banks are, in fact, studying a possible debit card fee. Among them is Wells Fargo, which has tested a $3 debit card fee in some markets.

During a conference call this week to discuss the banks third quarter earnings, executives said they would try to recoup about half the reduced swipe fees through a debit card charge to consumers, not try to reclaim it all, as Bank of America is doing.

“The way we think about that is, our focus is on building lifelong relationships with our consumers, CEO John Stumpf told reporters and analysts on the call.

Stumpf said the bank would listen to its customers to learn how they want to pay for what Wells Fargo says is value and convenience.

Interestingly, the Research Intelligence Group survey finds that any new debit card fees implemented by banks will likely be paid by those with the least amount of money.

The survey found that 22 percent of respondents in households earning between $35,000 and $49,000, are willing to pay the new fee, while only 14 percent of those in households earning more than $100,000 are willing to pay. The rest, the survey suggests will be among those looking for a new bank.