Students react negatively to debit card fees

first_imgThe USC Credit Union said it will not impose fees on customers for debit card transactions after national banks announced last Thursday they would begin charging customers a monthly fee for using their debit cards.Fees · Some Bank of America customers said they will switch to USC Credit Union as a result of the newly imposed fees on debit card customers. – Megan Harmon | Daily TrojanBank of America, Corp. said it will charge $5 for every month certain customers (who have not yet been determined) who make transactions with their debit cards. Though Bank of America is the latest to come forth with new charges, other banks, including JP Morgan Chase & Co. and Wells Fargo & Co., are also experimenting with a similar $3 charge.Michael Kim, USC Credit Union chief marketing officer, said as a non-profit financial cooperative USC Credit Union will not impose fees on its debit card customers.“USC Credit Union does not and has no plans to implement debit card fees,” Kim said. “As a non-profit financial cooperative, we strive to provide the best financial products and services to our members at lower cost than banks. That includes free debit card use, no monthly fees on our Cardinal Checking account with no minimum balance or direct deposit requirements.”Two-thirds of Americans use debit cards more frequently than credit cards, according to an Associated Press-GfK poll. When asked how they would react to a $5 fee, 66 percent said they would change payment methods.Though Bank of America claims the cost is justified because it covers fraud and overdraft protection fees, the Federal Reserve says 21 cents is a realistic fee for a debit card sale.USC Credit Union expects to see an increase in customers because of the new fees at other banks, Kim said.“Based on these recent news items, we certainly expect to see an increase in new accounts and we’re focusing efforts to further promote membership to the Trojan Family,” Kim said.Rachel King, a senior majoring in psychology, said she used to own a USC Credit Union card and a debit card, but canceled her debit card account after her bank began charging for transactions.“I had both a [USC] Credit Union card and a debit card from my bank in Hawaii and then my bank in Hawaii started charging me extra fees so I’m solely a [USC] Credit Union customer now,” King said.Though debit cards are more convenient, increased debit card fees can become a burden for college students, said Marisa Fentis, a senior majoring in psychology.“It’s frustrating because with a debit card, it’s easier to keep track of what you’re spending, but with a credit card it’s easier to spend more and makes it more difficult to pay off,” Fentis said. “Banks are already randomly charging me fees for things I don’t know about, and as a working college student, I can’t afford to pay small fees like that.”Kamil Massod, a junior majoring in biochemistry, said the fees are minimal and she will likely stay with Bank of America.“If I were to spend $500 on something, five more dollars is 1 percent of that, so it’s not as big of a deal,” Massod said. The benefits of using it outweigh the cost. I’ll probably still keep my [Bank of America] account for larger purchases.”last_img read more