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Monday, October 31, 2011

Bank of America Fee for Debit Card -- wrong fee!

I understand why BofA needs to come up with a new revenue source to replace the ones "legislated away" by Congress.  However, I think "taxing" the Debit card isn't the right service to tax.  It seems to me that they should charge for the over-the-counter services provided by their tellers.  The few times I actually go to a bank it always seems that the people in line ahead of me are doing activities that could be done better an an ATM --and a lot less costly to the bank.  The tellers represent a large labor expense.  The "brick and mortar" bank buildings represent a large real estate expenditure.  Why not charge for those services.  If people are charged extra for using a debit card, they will begin using checks instead!  Check processing is now "free" at most banks -- although, I'm sure that even with the new electronics, the check processing costs more than a debit card to process.  Why not charge a small fee for each check processed?   Some of those consumers who are now using debit cards could switch to credit cards -- however many of those users would be paying their balance off each month, so the bank won't be making that much more revenue.
I think most consumers are aware of the relative costs business encounters for the services provided.  They understand that most of the debit card processing costs involve "fixed costs" involved with the hardware and software, while those that require labor are a large variable cost.  I believe consumers would understand the need for charging for teller service and check processing vs charges for debit card processing which is done electronically

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