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®. This card issued by JPMorgan Chase (JPM) rewards you with a $100 Bonus after you spend $500 on purchases within the first 3 months of having the card. You can also earn a $25 Bonus after you make a purchase and add your first authorized user during these same 3 months. Earn 5% total cash back for each dollar you spend on rotating categories that change every 3 months (for up to $1,500 in combined purchases each quarter). Enroll for free each quarter in order to activate your bonus. Earn unlimited 1% cash back on every dollar you spend. Points never expire and there’s no limit to the amount you can earn. No annual fee. Enjoy 0% intro APR for 15 months on purchases and balance transfers. After the intro period there is a 13.99% - 22.99% variable APR for both. Read our review of Chase Freedom® here.