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Second Fed Rate Hike of 2018: Deposit Rate Predictions and StrategiesFees for PIN-Based Debit Card Purchases
POSTED ON BY Ken Tumin
Many reward checking accounts require you to use your debit card with the credit option (non-PIN or signature-based) when making purchases in order for them to count toward your monthly usage requirement. Some banks and credit unions will actually punish you if you use the PIN option with your debit card. GTE Federal Credit Union is one of these. A reader just sent me this link to their new debit card policy along with the following review of this situation:
The consumer advocate, Clark Howard, provides an example of how much more profitable the credit option is to banks in his show notes from 2007:
I'm sorry to see a credit union following banks in assessing fees when you select the debit option.
If you don't have a reward checking account, I'm not sure why one would use a debit card instead of a credit card. I know many have not opened reward checking accounts due to the additional risks of using a debit card. If you're in this camp, you may be interested in disabling the 'debit' feature of your debit card so it'll just operate as an ATM card. Clark Howard describes how to do this at this page. If your bank only offers a debit card and not a pure ATM card, this may be an option to consider.
Thanks to the reader who sent me this info on GTE FCU.
GTE Credit Union announced that they will begin charging customers 25 cents for every debit transaction made using the pin number starting 11/16/09. This is the total opposite of most banks which are rewarding their customers for paying with their debit card and using their pin number. GTECU advised that their customers can use their debit card but should sign as a credit card (customer's signature) and must not use their debit pin to avoid the 25 cent fee. A CSR at GTECU said that the bank is enforcing this as a way to make more money. To make customers feel good about this inconvenience, they are offering their customers "Reward Points". If a customer swipes their debit card using their pin an average of 50 times per month - the monthly fee would come to come to $12.50. GTECU is currently offering some of the lowest CD rates in the nation.
The consumer advocate, Clark Howard, provides an example of how much more profitable the credit option is to banks in his show notes from 2007:
If you go for credit, the merchant will pay $1.50 in processing fees. If you opt for debit, the merchant may only pay 17 or 18 cents. So the merchants are always battling with the banks over the use of these cards. Sometimes the banks will even assess you a fee when you select the debit option for a purchase.
I'm sorry to see a credit union following banks in assessing fees when you select the debit option.
If you don't have a reward checking account, I'm not sure why one would use a debit card instead of a credit card. I know many have not opened reward checking accounts due to the additional risks of using a debit card. If you're in this camp, you may be interested in disabling the 'debit' feature of your debit card so it'll just operate as an ATM card. Clark Howard describes how to do this at this page. If your bank only offers a debit card and not a pure ATM card, this may be an option to consider.
Thanks to the reader who sent me this info on GTE FCU.
hopefully the pin transaction fee will be far less than the foreign-ATM transaction fee.
If you are charged for debit transactions it is time to find another credit union.
I strongly concur here. Credit unions are supposedly "owned" by its members. Why would they allow such a fee, unless it is put to a vote and for members to voice that vote.
I use the signature option 99.9% of the time when using my debit card. I try not to memorize my pin so I am essentially forced to sign my card. Safer, and less chance of fraud. I don't, however, want to be forced to use it, incurring a fee if I need to get cash back. On the plus side of this, it is still much cheaper to get cash back at the POS than it is out of a "foreign" ATM.
Well there is a charge for using another bank's ATM machine.
Charging for debit card using is a little obnoxious.
"Beginning Wednesday, November 4, regular branch hours on Wednesdays will be 12:00 noon – 5:00 pm for all branches except Crystal River, North Ocala and Downtown Tampa, which will remain open from 8:00 am – 5:00 pm on Wednesdays."
https://www.gtefcu.org/HotTopics/BranchUpdate.aspx
"TAMPA, Fla. (July, 15, 2009) -After extensive due diligence, Suncoast Schools Federal Credit Union and GTE Federal Credit Union have elected to terminate merger discussions."
https://www.gtefcu.org/Home/DocumentHandler.ashx?ZG9jSWQ9NDI%3D-o57gBJqRC2U%3D
And how do you even verify that debit function has been disabled correctly? By using the very debit function you want disabled? I don't even know if it's working today since I've never used it before. So first, I would have to use it to make sure it is working, exposing myself to all the risks related to using debit. (otherwise, it's not possible to verify that it's not some other problem at the POS) Then have it disabled by a human more likely to make mistakes at this than not. Then I'll have to try to use it again to make sure it is disabled. Then I'll have to verify ATM function is still working by using it at ATM.
Very counter intuitive.
I asked for financial reports from a 3rd Level CSR on the phone, but they refused to provide them. However, they knew enough to point me to the NCUA site. I found the report. With a $33 million loss, it's no wonder they don't want us to see it. I had to find the report myself. My wife was told by a CSR that WE PAY FOR that they would rather charge a fee than have my business.
Look it up yourself. GTE is NCUA charter number 196.
Link: http://webapps.ncua.gov/ncuafpr/OnlineFPR.aspx?cu_number=196