How Durbin Amendment Affects Consumers

The Durbin Amendment was put into play effective October 1, 2011. The amendment has limited the amount of money banks can charge merchants that process debit card transactions for purchases.

In the past, banks made a lot of money from these swipe fees but now with the new limitations, banks are losing a lot of their reliable profits. As a result, the customers of the big banking facilities are now incurring more costs for services that in the past have been free.

Consumer Consequences

Consumers are struggling with their financial obligations with the recession and the high rates of unemployment. Adding new and larger bank fees makes it nearly impossible for some to survive financially from one month to the next.

Banks are imposing fees for many things consumers are not accustomed to paying. There is still the deficiency in bank customers that regularly neglect to review bank statements and account disclosures which detail changes being made to banking services, including new or increased fees.

Without opening the mail, consumers are often in the dark about what they are actually paying for just to maintain a checking or savings account. Maintenance fees, transaction fees, and monthly debit card usage fees are growing more common and more expensive.

Avoiding Financial Mistakes in Banking

In order to avoid paying more than necessary, there are a few things consumers can do now to create a more stable financial future. These actions include:

Comparing offers of other banks – see what else is out there that better suits your banking needs at rates you can reasonably afford and transfer your accounts to a facility with better opportunities and more customer-friendly incentives.

Be diligent about recording transactions – even one overdraft on your account can incur a $40 or $50 charge so it pays to be consistent in recording transactions and helps to leave a cushion in your account to protect you from simple math mistakes.

Use cash – instead of forking over various transaction fees for using ATMs outside of your banking network, plan ahead with your budgeting to make free cash withdrawals from the teller that allow you to avoid electronic transactions and their subsequent fees altogether.

Make savings a priority – the only way to ensure you have financial stability is to pay yourself first. Most banks allow for automated deposits from your paycheck or other bank accounts at no additional charge. Make a commitment to put away some percentage of your income to build up an emergency fund that can help you avoid financial disasters such as bank overdrafts or unexpected expenses.

Read the fine print – stop throwing away your bank statements. Be sure to review each statement and piece of correspondence that comes from your bank. If you neglect to read all of the information you are being given by your bank, you are likely to miss out on important details concerning fees and other account changes. Make sure to also read the fine print that often contains the most important details.

Deal with bank concerns – if you are not happy with the changes that are taking place concerning your bank accounts, stop by the bank and speak to a supervisor or branch manager. While there is no guarantee they’ll be of assistance, pleading your case can make a difference if you have been a long-time customer in good standing. Some banks will be willing to waive certain fees or account requirements simply because you spoke up.

Saving Money Despite Durbin Amendment Bank Changes was created by and is property of American Consumer News.

1)  Get a Bank of America “Keep the Change” account.  Whenever you use your check card to make a purchase, the change is rounded up to the nearest dollar and debited from your checking/savings account.  The difference is deposited into a savings account for you.  So if you’re purchase comes to $11.50, the debit will be $12.00 and the extra .50 cents is placed into your savings account automatically.  When you’ve saved a substantial amount, you can move it to a higher interest savings option of your choice.

If you don’t want to use Bank of America, you could actually do this manually, but you will “realize” you’re saving a little more than if you use the automatic Keep the Change account of Bank of America.  Everytime you make a purchase, transfer the change to your savings account online.

 2) Use Upromise and connect it to all of your bank cards and credit cards.  Whenever you use your cards to make a purchase, you could be putting aside some savings offered through the Upromise network which can then be used towards a child’s education or placed in a 529 account.

3) Replace your lightbulbs with the energy saving ones.  They cost a bit more initially, but they last 5 to 10 times longer than a regular lightbulb and consume less electricity when turned on.  Turn off the lights, television and other electronics when they’re not being used, and replace appliances with the energy-saver versions whenever it’s time to buy new ones.  The money you save on your electric bill will be considerable; not to mention you’re helping the environment.

5) Let your car save you money.  If you properly inflate your tires you can increase your car’s fuel efficiency.  Changing your air filter and driving under 60 miles per hour all help your gas go further too, as does having a gas cap that fits properly (reduces the amount of gas that evaporates before it’s used).  None of these things require a ton of effort on your part; but will go a long way in saving you money.

How to Save Money Without Realizing You’re Saving It was created by and is property of American Consumer News.