Monthly Debit Fees Opposed By Most Americans
Rising banking fees are frustrating consumers, and many are committed to avoiding these fees by switching payment methods. Recent surveys compiled by Mintel Comperemedia shows that 56% of shoppers would stop using their debit card if their bank or other financial institution began charging $2 a month for it. Only 19% of respondents would pay the fee willingly. Even though a $2 monthly fee sounds small, many banks that are trying to introduce it already charge monthly or annual fees for the checking account and every other service.
Many consumers are very serious about their dislike for higher fees. Nearly 25% of consumers responded that they would switch to a different institution over a small fee. 29% of them had heard about Bank Transfer Day, where American consumers were urged to open new accounts in consumer unions on November 5th. A whopping 13% actually did it, and 8% still plan to before the end of the year or in the beginning of 2012.
Banks first began encouraging customers to use debit cards over older payment methods like checks due to a lower cost to the institution for processing. Since these services have been free for years, most consumers won’t tolerate being charged for them now. Free checking accounts are also dropping rapidly. In 2007 three-fourths of bank advertising talked about a free checking account. Now less than 30% mentions the term. If banks continue to lose this level of traffic due to their rate increases, the money earned by these fees won’t offset the overall loss of revenue. Offering more optional and premium services for additional fees seems to be less likely to draw customer ire than charging for what consumers consider to be something they’re entitled to for free.