Bank Direct $12 monthly fee on checking accts starting Jan 2012

Discussion in 'American Airlines | AAdvantage' started by jaw_24, Nov 29, 2011.  |  Print Topic

  1. jaw_24
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    jaw_24 Silver Member

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    I heard this on a blog, saw the rumor mill buried in a FT thread, and finally decided to call. Sure enough, they will be charging $12/month on all mileage checking accounts starting in Jan 2012. This fee is not waivable in any way (balance, usage, savings, etc.)

    Definitely reduces the effective interest rate unless you have a sizable amount of $$ in the account. I'll probably be moving back to a 'real' savings account.
     
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  2. alohastephen

    alohastephen Gold Member

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  3. gleff
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    gleff Co-founder

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    I haven't used my Bankdirect checking as a savings account, I've used it as a checking account, my primary one since July 2003. Now I'm really irked at this since of course I'm not sticking really big balances in there but big enough to get something of value from the account.

    I haven't received any notice of this change yet. Rather vexing that they wouldn't offer more notice that they plan to take money from me every month.

    It's a pain to change banks, I admit I really don't want to and I have several ACH deposits set up into the account, not just payroll direct deposit but the management company which handles a rental property for me shoots over monthly rental income, and a couple of others who pay me (where it would be kinda challenging to change) ACH into the account. Plus of course lots of online billpays set up, both for initiating through the account and for initiating on vendor websites (like credit card companies).

    So I may wind up staying out of inertia. And I may stick more money in there to stick it to them and make them buy me more miles.

    Very sad.
     
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  4. swag
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    swag Silver Member

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    Same here. I actually just closed my other checking account in October, so BD is not just my primary checking, it's my only one. I'll definitely be looking for a new one, but may keep BD, since I have enough of a balance that even $144/yr is worth it for the miles I'll earn. I'm definitely turned off by the short notice.
     
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  5. gleff
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    gleff Co-founder

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    Short notice? I haven't gotten any notice from them... :(
     
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  6. mikeef
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    mikeef Silver Member

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    You and me both, Gary. Of course, they know that if they give you notice, about a zillion people will know about it instantly. Now, about a zillion people will know about it instantly, except you'll be more pissed than if they had bothered to tell you.

    (And I say that firmly tongue in cheek-I tend to doubt they singled you out. ;) )

    Mike
     
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  7. jaw_24
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    jaw_24 Silver Member

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    Personally, I'm moving everything over to my Chase checking acct. I opened it earlier this year just to earn the 10/10 cash back on my Freedom card, which transfers to Sapphire, etc... Now it seems to be the path of least resistance.
     
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  8. IPBrian

    IPBrian Silver Member

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    Just got my letter from BankDirect in the mail today. I just opened up the account two months ago. I always seem to be late to the party! Not too happy about this move.
     
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  9. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    I was about to open an account about two months ago when I learned here that they supposedly want proof that my entire paycheck gets direct-deposited into their account. Didn't want to do that (or feel that it was any of their business).
     
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  10. LETTERBOY
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    LETTERBOY Gold Member

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    I feel your pain, since I opened a Citi checking account solely for the AA debit card. About two months later, Citi dropped the AA debit card program.
     
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  11. arkleseizure
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    arkleseizure Silver Member

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    Just got my letter in the mail today as well. Goes nicely hand in hand with the change to the million mile program from AA. It would probably be marginally worthwhile to keep the account open, but I'll take this as a sign that it is time to move on. Time to go find a good bank signup promo!
     
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  12. hillrider

    hillrider Silver Member

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    Got the letter too. I'm closing my account. Turns out that they are cheap miles vs. the interest you'd get elsewhere (there's a calculation on a thread on FT), but AA miles devalue at around ~5-6% year and am not spending them fast enough, so it's a bad investment. Plus these miles don't help you get the million miler SWUs anymore, so that value is gone, and simplifying one's life has value too.
     
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  13. syphlix
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    syphlix Silver Member

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    hrmmm... i'm questioning what to do... on one hand if you're maxed the 240k miles/year is more than worth $144...

    on the other hand... wtf this is really annoying are they trying to shut themselves down or something? why would anyone else even use bankdirect they're the most backward ass online bank in the internet age i've ever dealt with!
     
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  14. MLW20
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    MLW20 Gold Member

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    I received my letter in the mail today... What nerve- I receive the letter on December 3 and they start charging in January! They should at least give us 3 months notice to be fair.

    Now I have to decide whether or not to close the account. I am leaning towards closing it out but need some good options of a new bank account offer. Anyone have some suggestions for me???
     
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  15. alohastephen

    alohastephen Gold Member

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    In case there happens to be a Bank Direct Lurker here:

    Hey! I'm closing my account next week unless you make a full reverse!
     
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  16. KtownTraveler
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    KtownTraveler Silver Member

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    Now you're just playing into BD's hands.
     
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  17. iolaire
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    iolaire Gold Member

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    Honestly I'll keep the account open. I'll jump through hoops to get 5k or 10k from citibank, so if I can still get that with the fee it's worth it, as long as interest rates remain low.
     
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  18. gleff
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    gleff Co-founder

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    Got my letter yesterday. A very sad day indeed. I've been very happy with BankDirect since July 2003 -- and not just because of the miles. I've had good customer service, though there are a couple of screwy annoying practices* but they really do seem to have started to dislike their customers, find us more of a tax and an annoyance to compensate for. Up the minimum balance, but no way to avoid $144 for the privilege of banking with them I admit I do resent a bit.

    * the practice I find annoying is that when they place a hold on a large deposit, they both make the deposit amount unavailable AND reduce the available balance by the amount of the deposit. If I have a $10k balance, and deposit a $20k check, they might not make the $20k available AND they reduce my balance by $20k. So my available balance goes NEGATIVE $10k! And then I have to hope they honor payments. They hit me with insufficient funds charges, which they manually reverse. They've never denied a payment, and they've never not reversed the charges. But it's still very annoying and unsettling. I"ve spoken to them about this and they say it's sort of an IT issue but that they have no intention to change it even though it makes no sense.
     
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  19. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    Seriously? The last thing I'd want from my bank is having to carefully track these kind of issues and have them manually refund charges for business practices I would consider illegal. I hope you earned enough miles to make it worthwhile. I probably wouldn't.
     
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  20. gleff
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    gleff Co-founder

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    I never had to ASK for the charges to be refunded, it always happened on its own but as I understand it's a manual process on THEIR end.

    I've earned many hundreds of thousands of dollars. Customer service has always been really helpful and responsive, they've overnighted bank checks and not ever charged me for either expediting or the fee for the check itself. I've had good experiences with them. But their IT is pretty backward. And now they do see to dislike having customers whom they see as a cost center rather than a win-win relationship as in the past.
     
  21. HaveMilesWillTravel
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    HaveMilesWillTravel Gold Member

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    That makes the whole thing even more bizarre of a business process.

    Dollars or miles?
     
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  22. gleff
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    gleff Co-founder

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    Hahah yeah miles, sorry! The very low interest rate would require a MONSTER deposit there to add up...
     
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  23. sun
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    sun Silver Member

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    Let's say you value AA miles at X cpm, your marginal tax rate is Y% and that you keep a balance of P grand in the account. Using RCA's you can get a pre-tax rate of 3% APY or more. The debit card usage requirements will get to you but its just a few minutes of work paying your utility bills in small increments.

    Assuming a constant earn rate of 10% of balance per month, the value of miles you earn over a year is $12PX-144. The post-tax interest money you are giving up is at least $0.3P(100-Y).Since the earn ratio drops off for balances above 200,000 it isn't wise to keep more than 200,000 in the account.

    Your valuation of AA miles needs to be at least (2.5+12/P-Y/40) cpm otherwise you are better off putting your money in RCA's and buying tickets from the interest. If you want to look at the picture before the fees were introduced, you needed X>=(2.5-Y/40).

    Let's look at some examples for P=200:

    Y=20% X >= 2.06 now X>=2 before
    Y=30% X >= 1.81 now X>=1.75 before
    Y=35% X >= 1.685 now X>=1.625 before
    Y=40% X >= 1.56 now X>=1.5 before
    Y=47.62% X>=1.3695 now X>=1.3095 before (I believe the largest marginal tax rate is 47.62% for a NYC family earning more than 500k in a year.)

    Now, if you keep just 100g's in the account, add 0.06 to the above numbers. For 50g's add 0.18 and for 25g's add 0.42.

    The largest value I am willing to put for X is 1.5 and for me it didn't make sense before and it doesn't make sense now to continue to keep the account. I was hanging on to the account because of the various bonuses and having received all of them over the last 2 years, I am going to close the account and move on.
     
  24. Ed1

    Ed1 Silver Member

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    I received my letter yesterday, I was told I must close my account prior to January 31st to avoid $12.00 fee.
     
  25. JetsettingEric
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    JetsettingEric Silver Member

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    Part of this is likely driven by the government - increased FDIC surcharges and Dodd-Frank rules make being a larger deposit bank unattractive. By shrinking their balance sheet (getting rid of deposits) - they can likely get better treatment under the new rules.
     
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