In the aftermath of Bank of America’s new $5 monthly debit card fee, politicians, consumer groups, and plain old angry consumers have denounced such fees as unfair and arbitrary, and pleaded with BofA and other financial institutions to get rid of them. But instead of asking these banks to reverse their decisions, perhaps it’s more productive to ask why it is you’re doing business with them in the first place.
As soon as Bank of America announced its new debit card fees—$60 a year for debit card usages for most customers, even if you only swipe it once a month—the reaction has amounted to something along the lines of: Hey, you can’t do that!
The wheels were soon in motion to see to it that banks would be unable to proceed according to plans. Consumers Union first called for a federal investigation of the new debit card fees, and later publicly urged BofA, Chase, Wells Fargo, and other institutions to kill off such fees. Meanwhile, local lawmakers around the country are trying to join the fight. A Florida legislator is imploring the state to ban the fee, for example, and a Massachusetts city councilman is trying to get a resolution passed that would remove all municipal funds held by Bank of America. (The latter move appears mostly symbolic; the city, Springfield, had only $3,580 in a BofA account.)
While the anger over the fees is entirely understandable, the way the battle is being fought may be a bit misguided. If a restaurant raised prices or added odd fees out of the blue, would you start protesting the moves as unfair? Or would you just stop going to that restaurant?
(MORE: Wall Street Protests Get Specific: Could ‘Bank Transfer Day’ Pit Americans Against Their Big Banks?)
The StarTribune‘s Eric Wieffering writes that banks are being unreasonable for thinking they have the right to overcharge for debit card usage, and consumers are being unreasonable for thinking they have the right to use debit cards without paying for the service in any way whatsoever:
The foot-stomping frenzy about debit card fees reminds me of a sandbox showdown between 2-year-olds.
The Los Angeles Times‘ Michael Hiltzik is of the opinion that consumers should actually be thanking Bank of America because unlike so many other opaque, sneaky fees, the new debit card charge is upfront—and therefore easier to understand and avoid:
It’s always best for consumers to know what they’re paying for and how much, because customers can then shop around for cheaper services.
(MORE: Are Debit Card Fees Meant to Get Customers to Use Credit Cards More?)
Yahoo Finance’s Dan Gross is another expert who welcomes debit card fees because, all things considered, it’s better for everyone if banks charged for services used directly by customers, rather than trying to make money by gathering all the customer deposits possible and lending those funds recklessly to hedge funds, unqualified home buyers, and other banks. What’s more, the rise of debit card fees should make it plain that bigger banks don’t necessarily have better banking services:
Big banks’ efforts to make banking more expensive might provide an opportunity for smaller, better-managed credit unions and community banks — you know, the guys who didn’t blow up and require government support — to get a leg up on their much larger competitors.
So instead of stomping your feet in anger about bank fees, why not just shop around? Bloomberg cites a new survey revealing that 30% of consumers would switch banks due to debit card fees. Even more customers would avoid the fees in other ways: 43% said they’d start paying with cash or credit cards rather than debit card fees. (Interestingly enough, the banks may be pushing debit card fees to entice customers to switch to credit cards.) According to the survey, the poorer you are, the more likely you are to stick with your bank even if it starts charging debit card fees: 22% of low- to middle-income consumers (annual household incomes of $35,000 to $49,000) said they’d be willing to pay the fee, compared to just 14% of consumers with incomes over $100K.
The poorer you are, the more these fees hurt. So why would less well-off individuals be more willing to pay them? Because these people feel like they have fewer banking options, according to survey analysts.
In fact, there are other options. And in fact, since the debit card fees made news, consumers have been shopping around and switching banks in large numbers. Small banks and credit unions have seen an uptick in new customer accounts, as have online banks with minimal fees and decent interest rates (relatively speaking) such as PerkStreet Financial, ING Direct, and Ally Bank.
(MORE: How to Divorce Your Bank in 5 Easy Steps)
The point is: If you don’t want to pay absurd bank fees, you could sign a petition or write your congressman or plot a campaign to try to get your bank to change its policies. Then again, you could also just start banking with an institution that doesn’t charge ridiculous fees.
Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.