October 3rd, 2011 
Nichelle As I hear the news of Bank of America’s new $5 fee for debit card purchases, it got me thinking about the class hierarchy of credit and debit cards.
Credit Cards: If you have a great credit score, pay off your bill monthly, you can get a “wonder card” with low interest, reward points and all kinds of perks. People who have these cards have more than a steady income or paycheck. These cards are targeted toward upper middle class professional.
Prepaid Credit /Debit Cards: If you have a bad credit score, no bank account, then you have prepay first to get credit card. People who have no bank account are called the “unbanked”. Plastyc, who presented a few weeks ago at Finovate, has a debit card for the unbanked called the UPside card that also encourages users to save money. These cards are targeted the poor and/or immigrants who have not opened up an US bank account.
Regular Bank Debit Cards: People with bank accounts, but either prefer to use debit cards instead of credit cards or they may not have a credit card. Or they don’t have one with low interest so the credit card is used sparingly. I equate this group with being the middle class. Debit cards have been a lifesaver for the middle over the last twenty years. It has enabled people to make big purchases without affecting their credit. In fact, debit cards has been a boon to consumer spending. Five dollars a month may not seem like a lot of money, but banks are pretty laying the gauntlet and saying, “We only care about the rich people”. I am making generalizations, but if all the big banks start charging debit fees, then middle class consumers will cut back on spending with debit cards and may greatly reduce spending altogether.
