NEW YORK (10/24/11)--A number of credit unions are touting their no-fees policies for debit cards, but Bethpage (N.Y.) FCU's lifetime no-fee guarantee has stepped up the game and attracted attention from TIME, The New York Times blog and Associated Press.
Bethpage announced Wednesday that it will not charge checking account-related fees including fees on debit card transactions, maintenance fees, minimum balance fees, and no fees for foreign ATMs for new member checking accounts. Its new Bonus Checking Always Free, No Fee Guarantee also includes free checking, online banking, mobile banking and telephone banking for the life of a new member's checking account.
Members also earn 1% annual percentage yield interest on the account balance by using direct deposit, having free online banking with eStatements and making 15 point-of-sale debit card transactions each month.
In the past three weeks, since Bank of America's announcement that it will charge $5 a month for debit card use, Bethpage has opened 1,500 new checking accounts--double its customary amount for a three-week period. Since it launched its free checking product in June 2010, it saw a 17% increase in new member households opening checking accounts from the year before.
"We are seeing significant, fundamental changes taking place in the banking industry that are transforming the way people do their banking," said Kirk Kordelski, Bethpage FCU president/CEO, in a press release.. "These changes, coupled with consumers' overall discontent in the financial arena, are creating positive awareness about the advantages of banking at a credit union."
Kordelski noted that "Bethpage is a trustworthy alternative to the big banks and consumers should not be charged a fee to access their own hard-earned money."
Hei told Associated Press (Oct. 21) that "People are literally walking into branches and cutting up their Bank of America cards."
The article compares the movement to switch to the 2010 "Move Your Money" project started by The Huffington Post.
However, Credit Union National Association President/CEO Bill Cheney sees a difference between that movement and the current Bank Transfer Day movement. "'Move Your Money' was good for credit unions, there's no question," Cheney told Associated Press. "But this seems to be a more visceral reaction this time. People aren't just doing it because they like credit unions; they're doing it because they're mad at their bank."
In other credit union efforts, Freedom CU in Warminster, Pa., announced Friday that while banks charge $5 in monthly fees to use a debit card, the credit union will pay, for one year, $5 to members making a purchase with their debit card. Members can earn up to $60 when they switch to Freedom's Free Interest Checking Account. "Freedom has always offered convenient free checking with interest. Freedom's debit card is free to use, and will remain that way," said Lee T. MacMinn, Freedom's president/CEO.
Freedom also has a "It Pays to Switch" Debit Card campaign highlighting the card's benefits. The campaign includes billboards in and around Philadelphia, direct mail, search engine ads, and larger-scale social media updates on Facebook and Twitter.
According to TIME columnist Brad Tuttle, "credit unions understand that the absence of fees helps them woo customers away from the big fee-crazed banks." Also, "smaller players will do everything they can to avoid adding fees to keep a competitive advantage."
So how can Bethpage start offering services for free? "As The New York Times blog reports: It already wasn't charging most of those fees anyway. For that matter, many other credit unions and small banks don't charge for most of those services either," the TIME columnist said.