Banking Blog

Finance Blogs » Banking » Consumers refuse debit fees

Consumers refuse debit fees

By Marcie Geffner · Bankrate.com
Friday, October 21, 2011
Posted: 9 am ET

Major banks that hope new monthly fees for debit card use will help them recoup the higher income they used to earn from merchants on such transactions might be disappointed.

Substantial proportions of consumers say they won't pay the new fees, according to a recent online survey that found 43 percent of respondents would change their payment method and 30 percent would quit their bank, rather than pay a debit card fee.

Only 13 percent of the respondents said they were willing to pay a debit card fee and then only if it were "reasonable," the survey found.

The survey of 1,000 adults was conducted Oct. 7-10, 2011, by The Research Intelligence Group, or TRiG, a marketing research firm in Ft. Washington, Pa.

TRiG CEO Bruce Shandler said in a statement that financial institutions "will certainly take a hit in the hearts and minds of consumers" if they impose a monthly debit card fee.

The catch, of course, is people don't always follow through on their intentions. The researchers noted that far fewer consumers would change banks to avoid a debit card fee if such fees were universal and couldn't be avoided that way.

Switching also is predicated on the customer's awareness of the bank's fee structure, which is often not the case.

"Customers," the researchers said, "historically, do not have a strong sense of their (bank) fees."

Of those who said they'd change their payment method, the survey found 28 percent intended to use cash while 15 percent planned to use credit cards instead of debit cards. Changing payment methods was the most likely strategy for people who were ages 45 to 64 or had a relatively lower annual household income.

Changing banks was the most popular solution for people who lived in the Western U.S., were ages 18 to 54 or had an annual household income of $100,000 or more.

People who lived in the Northeast, were 61 or older or had an annual household income in the $50,000-to-$100,000 range were most inclined to increase their credit card usage.

Follow me on Twitter: @marciegeff

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
Ed T
October 23, 2011 at 6:55 pm

Debit cards, and EFT (electronic funds transfers) were adopted because they SAVE the bank money. Now they want to charge for it once we have adjusted and adapted our lives to it? I have friends who still write checks. What's up with that? I never carry cash. I adopted the Debit card, and direct deposit years ago. I pay all but one of my bills online, automatically in most cases. The banks are just trying to pinch us (their patrons) because they have been called out for overcharging merchants and have had limits imposed.
I really can't predict what I will do if they try and charge me to make debit card purchases. I refuse to pay even a dollar fee for a cashback transactions, so likely I will gravitate toward whatever option is feeless. The banks could not make their billions of dollars profit without our cumulative deposits. They have some nerve trying to charge us to use our own money while they use what we leave on deposit to loan and speculate. Grrrrr.

Wolverine
October 21, 2011 at 9:56 am

"The researchers noted that far fewer consumers would change banks to avoid a debit card fee if such fees were universal and couldn't be avoided that way."

Nawwwwwwwwwwwwwww, REALLY?
These researchers are GENIUSES. I mean, why would people even change banks if ALL of them would charge the fees?

Oh, America...