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Friday, September 30, 2011

How To Kill An Already Sluggish Economy ...

Well we can thank the banking industry for this one ... Led by Chase Manhattan and Bank of America, we can expect the industry which pushed for "electronic cash" to kill the monster of their own creation.

Beginning tomorrow (October 1st) it will now cost you if you use a DEBIT card ... Not a credit card.

Remember that a DEBIT card draws money straight from your acct - it's basically YOUR MONEY which you are getting without needing to stop off at a tellers window ... If you use the machine at the mall which uses several different banks cards - there is usually a fee for them to do the transactions with all those other banks ....

THIS IS DIFFERENT AND ON TOP OF THOSE FEES

BoA will be charging you $5 ... This is to make up from the revenue loss they anticipate when the Durban Transaction law takes effect.

This law is meant to protect small businesses from paying exorbinate amounts to the banks for letting people use their debit cards instead of a regular credit card.

Most people do not realize that not only do businesses which use credit cards have to pay a rental fee on that little scanning machine, but they had to pay a portion of what they sold to the card company as well ... according to my father Discover card would take/charge he most so he tried to stay away from accepting them at his business for the longest time.

Under the Durban Law, the cost that businesses have to pay banks is limited to a maximum charge of 21¢ per transaction - no longer a percentage of the total goods sold, which AVERAGED to 44¢/purchase.

In a society where quicker-is-better I think the banking industry is slitting their own throat here... they will be forcing those of middle & lower income to stop using not only their credit cards, but also their debit cards.

Many stores & restaurants have switched over to a "no checks" policy ... or banks have made sending checks back to people an extra charge if they do it at all ... or charge for each check written ... or even charge if they have to send you a paper statement in the mail (the real reason behind the postal crisis, but that's a different story)

Even worse is the fact that many
People don't have the option of getting to their money any other way ... most companies force their employees to use direct deposit because it saves the company money on their transaction fees ... it saves them the cost of have to buy the machines to print up pay checks ... it saves them from having to have separate paycheck paperwork on hand, a pay-stub can be drained and ran off on plain paper if need be where a check has to follow very strict guidelines.

Wells Fargo & Chase banks say they already are "testing" a $3/month fee but only in certain locations ... You can expect that to go across the nation now.

Also beware of BoA's online acct ... It will charge you an extra fee if you use or go through a branch bank ... Even if it's THEIR bank ... Yes, BoA will charge you for using another BoA bank.

FAST FACTS
BoA issues about 15% of the debit cards on he market (largest share)

BoA customers spend $260Billion/yr using JUST debit cards

BoA Q2:Fee income DOWN 23% in 2010 ($1.9 Billion)

ATM Fees: record highs for 7 straight years

$$$$$$
I heard one tip on the radio finance program this morning ... but it is very risky.

They suggested using your credit card to make your purchase - but then as soon as you got home from your shopping trip, before the debt even hit your credit card account -- go online and pay of what you just put on (get out that calculator).

It sort of makes sense - that way you are not incurring monthly fees for running a balance ... and most fees charged by banks for any online fee is going to cost you less than the monthly interest fees you would pay on the credit card ...

Expect the banks to soon close this loophole as well of it seems to be the practice people adopt.

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