debit cards

Data has been breached at a payments processing firm and the personal information of up to 10 million users can potentially be compromised, says security blog Krebs on Security.

Apparently, the scale of the breach is "massive" and major credit card companies like Visa and MasterCard have been alerting their customers about this development and to reassure them that the actual Visa and MasterCard's internal systems haven't been breached. It's a third-party processing center called Global Payments Inc. Worried about your information being used by hackers? Here are a couple of security tips:

• Review: Check your credit card statements online to see if there is any unusual activity.
• Get ready: If you're one of the consumers whose data has been compromised, you will most likely be contacted by your bank. However, you should still be monitoring your information on your own, just in case you were missed.
• Sigh up for alerts: Sign up for email or text transaction alerts if your bank provides this service.
• Contact your bank immediately: Call your bank if you see any suspicious activity and have them reissue you a card immediately. The sooner you report fraud, the better protected you'll be.
• Limit your cards: You'll worry less with only one card to keep an eye on. Going forward, try to reduce the amount of cards you're juggling if it makes sense for you to do so.

Consumers, your voices were heard! Bank of America announced today that it is dropping its plan to charge debit users $5 a month for usage. This comes after a surge of public disapproval about the fees. Thousands of customers flocked online to sign petitions — one by change.org received over 300,000 signatures. Politicians like President Obama and Vice President Joe Biden have also spoken against the fees.

David Darnell, the bank's co-chief operating officer, says, "We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee . . . Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."

Two other banks, Chase and Wells Fargo, also announced last week that they decided not to charge customers debit usage fees after testing the $3-a-month fee with pilot programs in several markets.

Many are unhappy with the debit card fees introduced by banks that want to reap more profit from their customers. I'm sure by now you've heard about the $5 monthly fee Bank of America is planning on charging for debit card usage. Other banks plan to follow suit and consumers have been lashing back, threatening to cancel their accounts.

According to a SavvySugar poll, 91 percent of readers are unwilling to pay the extra debit card fees and will resort to methods such as using a credit card or cash. About 44 percent say they plan on switching banks to avoid paying fees.

If you're looking for a debit card that won't charge you for your swipes, here are three suggestions:

PayPal: If you already have a PayPal account, you might want to consider the PayPal Debit MasterCard. The debit card will tap into your funds in your account or the bank account that's synced with your PayPal. There are no fees when using this card with businesses that accept MasterCard. Keep in mind that there are fees for withdrawing money from ATMs, unless it's a Maestro or Cirrus ATM. You'll also be charged fees if you use the card when you're out of the country.

ING Direct: ING Direct customers not only get decent interest rates (0.3 to one percent for checking accounts, depending on the amount of money in the account), but they can also opt for a relatively fee-free debit card. You won't get charged when you use your debit card to purchase items and there are over 35,000 ATMs around the country that allow for fee-free withdrawals. To get the card, all you need to do is sign up for a checking account with ING. You'll also be charged foreign transaction fees with this card. If you're not an ING Direct account holder, be sure to check out other online banks — they will likely offer similar deals.

Read on to find out more.

Bank of America customers will now have to pay an additional $5 a month just for using their debit card, reports Bloomberg. This amounts up to an extra $60 a year in debit card usage fees.

Apparently, the banking giant needs to cut its debit card losses from the Durbin amendment to the Dodd-Frank financial act. The amendment basically ruled that debit interchange fees be reduced, and BofA plans on making up for its losses by tacking on an extra fee for debit card holders. This new fee will be rolled out early next year.

Those who don't use their debit cards or who only use their card for ATM withdrawals will be exempt from this fee. This is just a sign of the times, and consumers should start expecting more fees from their banks. However, take note that Citigroup has said that it won't be charging debit card usage fees when restructuring its accounts to make up for the loss of profits.

Bankrate has some great advice on what to do if your bank starts charging a debit card fee: "If your bank begins charging a debit card fee and you don't want to move your checking account, you can always go back to carrying a credit card. As long as you pay off your balance every month, credit cards can have advantages over debit cards such as rewards programs and better protection from fraud liability."

I'm sure your ears perk up when you hear about debit fees being reduced. However, the move is probably more beneficial to retailer big wigs, and not everyday consumers like you and me. The "swipe" fees are charged every time a customer chooses to use their debit card. Currently, the fee stands at 44 cents, but a recent verdict has brought it down to 21 cents.

This lowered rate will cost banks about $9.4 billion in revenues, according to CardHub.com. However, it's not certain if consumers are going to feel any effect from this. For example, since these customers don't really notice these fees, businesses might pocket the savings instead. In fact, this new turn might actually hurt us, because banks might charge customers higher fees on other transactions in order to recoup from the loss. Frank Keating, president of the American Bankers Association tells the New York Times:

"The final rule still represents a 45 percent loss in revenue that banks use to provide low-cost accounts to our customers, fight fraud and maintain our efficient U.S. payments system . . . Consumers will see higher fees for basic banking services, and banks — particularly community banks — will still feel the revenue pressures that this rule will cause."

We're thrilled to present this smart LearnVest story here on Savvy!

We’re a fan of debit cards. They’re convenient, help us track our spending, offer rewards, and best of all, keep us out of debt because they limit our spending to what’s in the bank. Which is exactly why we’re a little concerned that their free and rewarding usage is under attack.

A Little Thing Called The Durbin Amendment

Currently, banks charge retailers a fee every time you use your debit card (an interchange fee). The current average fee for a signature debit card transaction (when you use your debit card like a credit card) is $0.56, and the interchange fee for a PIN transaction is $0.23.

In less than a month, Congress is slated to implement the Durbin Amendment to the Dodd-Frank Wall Street Reform Act (which passed with bi-partisan support). This hotly-debated amendment would cap interchange fees for debit card usage to $0.12.

The intention of this bill was to invigorate the economy with savings to retailers, which would theoretically be passed down to the customer.

But banks will take a huge hit on revenue, about 70%, according to a spokesman for the American Bankers Association, and that loss will also get passed on to the customer. With big retailers on one side of the debate and big banks and credit card companies on the other, which side is for the consumer?