WASHINGTON (11/2/11)--Just 3% of consumers surveyed say they would continue using their debit card as usual if a fee were imposed. Instead, the overwhelming majority of more than 2,400 people in an online poll conducted by the National Foundation for Credit Counseling (NFCC) would change financial institutions to avoid paying a debit card fee.
"People have become very aware of how they spend their money, even small amounts, and that's a good thing," said Gail Cunningham, NFCC spokesperson. "The poll results send a strong message, but at this point the message remains a sentiment. Only time will tell if people will follow through and actually change long-ingrained habits."
NFCC cautioned consumers, like financial institutions, to evaluate their options and prepare for any changes that might affect their accounts. It listed pros and cons of each option for consumers.
The poll found that:
- Sixty-two percent of those surveyed say they would find a financial institution that doesn't charge debit card fees. That keeps the availability of a debit card while avoiding fees. However, NFCC cautioned that changing financial institutions can be difficult. It advised consumers to keep their old account open for three months while establishing the new account so transfers can be made and to check the convenience of ATMs, the fees, and costs of a new checking account at the new financial institution.
- Twenty-two percent would begin paying with cash. That controls spending because a consumer can't spend more than he has. However, carrying large amounts of cash can be dangerous and inconvenient, said NFCC.
- Eight percent would pay by check, which maximizes the use of the existing checking account that may already have a fee with it. Using checks can be inconvenient--some places don't accept them as payment. Also, consumers using checks have a chance of bouncing one and incurring overdrafts.
- Five percent say they would begin charging purchases. While charging creates a credit history and a credit score, and, if handled responsibly, can work for the future financial needs, it's easy to charge too much and overspend. If not handled properly, charging goods and services can result in financial disaster, said NFCC.
- Three percent said they'd keep the debit card and avoid the potential hassle of changing financial institutions. But this would add yet another fee to the terms from the bank.
NFCC advises consumers to do their homework and evaluate all options. "The bottom line is that banks have the right to assess fees, and consumers have the right to choose whom they do business with," said Cunningham. Before leaving, the consumer should ask the bank to waive the fee.
The Credit Union National Association, state leagues, and credit unions nationwide suggest that consumers can switch to a credit union to avoid high debit card fees. They are working with media nationwide the past month to encourage consumers to consider turning to a credit union to avoid high fees charged by big banks. Saturday is Bank Transfer Day, a day set aside for people to switch institutions. However, CUNA points out that any time is a good time to switch, and that credit union membership has benefits worth a switch.