We all know it’s best to pay cash for things, unless you can pay off your credit card bill every month to avoid being charged extra interest fees. One of the easiest and safest ways to “pay cash” is by using your debit card. A debit card takes money directly your checking account, it typically offers fraud protection, and you can instantly download your transactions into budgeting software like Quicken. Merchants pay less on a per-transaction-basis for debit card payments versus credit card payments; consequently, many vendors encourage debit card use whenever possible. As of today, merchants will pay even less. New financial regulations that went into effect October 1, 2011 cuts the merchant transaction fees for debit card payments essentially in half: from an average of 44 cents per transaction, to 24 cents per transaction. This is great news for merchants. However, depending on which company you bank with, it may not be great news for you.

This is because banks lose income when debit card transaction fees are lowered, so banks will typically try to make up the money in other ways. If they can’t make up the money by charging merchants, they will try to recoup their losses by charging customers. Bank of America has indicated the lowered debit card transaction fees will cost them approximately $2 billion annually, MSNBC reports. As a result, Bank of America will soon be charging all of its customers (except high-value or premium account holders) $5 a month, each and every month their debit card is used.

Customers will only pay the fee for months in which they use their debit card, but that means if you use your card just one time in a month to buy a $3 coffee, that $3 coffee just became an $8 coffee. This change will cost BofA customers up to $60 a year to use debit cards pay from their bank account—rivaling the annual fee of some credit cards. Of course, debit cards still won’t charge interest like credit cards do, but why pay fees when you don’t have to?

If you’re an affected bank customer, the solution may not be to leave your bank altogether since The Seattle Times reports that other big banks, like Wells Fargo and JPMorgan are following suit with the increased customer fees. Additionally, it can be a hassle to change everything over from one bank to another bank if you have things like direct deposit and automatic payments set up. So, as long as your current checking account isn’t paying you much—if any—of an interest rate for the amount of your average daily balance, you may want to check out some online-only banks.

Since online-only banks have lower overhead costs, many are still offering free checking, free debit cards, free checks and free online bill pay. Several also offer additional benefits, like a percentage cash-back each time you use your debit card without typing in your PIN. In many cases, online banks also allow you to transfer money electronically between other banks for free, so you can keep your primary bank account and just transfer money as needed to your online bank account for debit card purchases. Banking this way can also be a great budgeting tool. Since you will still have your main account set up with your direct deposit and your regular bill payments, you can only transfer to your debit card bank account exactly what you would like to spend on debit card purchases each month. This can prevent you from draining your main bank account by purchasing excessive $3 coffees. Of course, you’ll also have the added benefit an extra $60 a year in your pocket since you won’t be paying debit card fees.

First Priority Bank if offering a 1.50% APY electronic savings account rate that is guaranteed through September 30, 2011. That's one of the best savings account rates according to the BestCashCow rate tables. The downside? Only residents of NY, NJ, and PA are eligible to recieve the rate according to the CSR I spoke with. In addition, First Priority is dedicated to concierge service. That usually means they service higher net worth individuals like a private bank. It's unusual to have such a competitive rate that is also guaranteed for a period of time. After September 30, First Priority can adjust the rate downward.

To get this rate, the account must be opened online and you must also opt-in to receive e-statements. According to the CSR, the account can be funded via an ACH. The minimum balance for this rate is $7,500. You'll earn .50% APY for balances from $50 - $7,499.

The bank holds $280 million in assets and operates five branches in Eastern PA, new the New Jersey border. It's Texas Ratio of 24.7% (see what Texas Ratio means) is slightly higher than the national average and it has a Return on Equity of -3.81 % versus the national average of 7.75%. The bank is FDIC insured.

A recent study of the number of home sales in the second quarter of 2011 shows that more than 30 percent of that figure is due to sales of foreclosed homes or homes in various stages of foreclosure. In 2010, that figure stood at only about 24 percent, so there has been a 6 percent increase in the number of homes that have sold that have at least started foreclosure proceedings.

One of the reasons so many home buyers are looking to foreclosed properties is because the sale prices are an average of 32 percent less than comparable homes that are not foreclosures. In addition to that, buyers can typically move into a foreclosure faster and the selling process is much shorter than the process of selling a non-foreclosed property.

But buyers aren’t the only ones who can benefit from the rise in sales of foreclosed properties. There are many distressed homeowners who can benefit from this trend. There are many homeowners who do not qualify for a loan modification or refinancing. This leaves them with very limited options. In some cases, the most obvious and strategic option is to put their home up for a short sale. This gives buyers the lower prices they are looking for as well as a streamlined buying process which means they can move into the home quickly while the home seller avoids full foreclosure. It seems like it’s a win-win situation all the way around.

On the other side of the coin, another study found that the number of homes that went into foreclosure during the second quarter of the year actually dropped. The percentage fell to its lowest point in four years.

Now for the bad news. Despite the fact that more foreclosures are selling and the number of homes entering foreclosure has dropped, the percentage of homeowners who are currently delinquent on their mortgage payment has increased to 8.44 percent which is an increase of 0.12 percent from the first quarter of the year. According to Mike Fratantoni, vice president of research and economics at MBA, the increasing delinquencies is troubling because it shows that there is not sufficient job growth to help bolster the economy. And since new delinquencies often end up as foreclosures, that could only mean that the number of foreclosed homes and properties is going to rise.

Does it ever seem like this vicious cycle is going to end?

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