Bank of America Charges for Debit Cards

Bank of America announced that it's charging debit card users $5 per month to pay for purchases using the card. The Federal Reserve capped the per-transaction swipe fee. Banks have been pushing consumers away from cash purchases. When buyers use cash, banks can't collect fees.

Banks were charging merchants up to $.44 per debit card transaction. Now they can now only charge $.21 each. They're scrambling to keep fees coming in. Banks already penalize accounts that don't maintain minimum balances: around $1,500. This hits youth, teen and college students especially hard. My sons both pay fees because they were unable to maintain a minimum balance. One was charged steeply when he had to withdraw funds to pay college tuition.

We're forced to use bank products, and charged to do so. I have a family of six. We opened accounts for the kids early on. I'm a frequent shopper and spender. Here's how I beat bank fees and teach my children to do likewise.

* I shop around for banks. Credit unions are supposed to be collectives, but we've been stung. Our son was fined by his credit union because his employer issued a bad check. Not only was he out his wages, he had to pay $25. Had he cashed the check outright, he might have avoided fees.

* I don't open parent-funded debit cards for my kids. That's just a way for banks to charge parents even more.

* I read read the fine print. I balance my checkbook and verify every transaction and fee. I have caught fees wrongly charged and had them reversed.

* I don't pay-to-pay or pay-to-buy. Many utility and phone companies, medical billing agencies, credit card companies and vendors charge a fee to pay. I pay using the least expensive option: mail, online with an ACH, by phone with check or credit card or, if local, in person.

* I use automatic withdrawal. I have my mortgage, phone, internet and cellphone bills automatically deducted to avoid fees.

* I won't pay for bank transactions. I missed a payment on my credit card; I thought it was automatically deducted. I called the bank and asked to have the funds transferred immediately. The bank charged $15 to transfer money over the phone. The fee was waived, or I would have paid in person or online.

* I use online banking. I manage my bank account online, but I also have a PayPal account for online purchases and payments. It costs nothing to transfer funds between Paypal and my bank account.

* I explore payment options. When I pay bills, make online purchases, buy groceries or shop, I do the math to see which payment options costs, which are free and which actually earn reward points.

* I order checks online. I paid $9 (with shipping and handling) for 200 checks. I buy the cheapest checks. I save between $20-$50 on checks, including check printing software.

* I keep the required minimum balance in my account to avoid fees. I don't buy on impulse.

* I combine purchases and swipe less. Whenever possible, I pay for everything in one transaction. If I need cash, I get it with the purchase. Fewer transactions equals fewer fees.

* I swipe at bank ATMs, not stores. Debit card fees are charged for vendor transactions, not ATMs. I use ATMs at my bank to avoid other bank charges.