Last week, Bank of America (BAC) announced that they will start charging a $5 monthly fee on their debit cards, and it seems like other banks will be charging similar debit card fees in the months to come. This $5 monthly fee adds up to an annual fee of $60! That's a lot of money, especially if you don't use your debit card that often. I always thought that using credit cards was a better way to make purchases compared to debit cards, and this news article only reinforced my view. Credit cards offer better protection than debit cards when it comes to identity theft, plus they reward you with cash rebates, rewards points or airline miles when you use your credit card to pay.
As is expected, this new debit card fee hasn't been welcomed kindly by Bank of America customers; one TV host and news journalist even cut up her debit card on live television to show her indignation. BofA stock fell by more than 3.5% on Friday, and the bank website was apparently hacked into on Friday even though it was denied.
On the flip side, now that some banks are charging fees to those who have debit cards, credit cards are offering even more generous rewards than they used to, many of them with no annual fee. One of my favorite credit cards, Chase Freedom®, gives new sign-ups a Bonus of $150 after spending just $500 on purchases within the first 3 months of having the card, and lets them earn rewards for each dollar they spend.
updated Aug 25, 2016
Katrina Gutierrez is a writer at GET.com, a lifestyle and personal finance website. Email: email@example.com.
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