Bank of America, the country’s biggest consumer bank by deposits, recently went public with their decision to begin issuing new fees to customers who pull out their debit card when making purchases. The $5 monthly fees will begin being issued January 1, 2012.
As Bank of America spokeswoman Anne Pace stated to Bloomberg News, “the economics of offering a debit card have changed with recent regulations, and we’ve decided to introduce a monthly fee for customers who use their debit cards for purchases.”
This announcement has caused much outrage among consumers and politicians alike, especially in light of the fact the Bank of America received a federal bailout to the tune of $45 billion, as reported by foxnews.com.
The “recent regulations” referenced by Pace are the “swipe” fee caps that went into place on October 1, restricting the amount banks can charge merchants per debit card transaction.
“It seems that old habits die hard for Bank of America. After years of raking in excess profits off an unfair and anti-competitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” said Senator Dick Durbin, D-Ill, in a statement, according to foxnews.com. Durbin, after whom the “recent regulations” are named (i.e. the Durbin Amendment), also stated “It’s overt, unfair and I hope their customers have the final say,” in regards to BOA’s new fee.
Bank of America is not the only bank levying new fees upon customers in an attempt to recoup revenue losses as a result of the Durbin Amendment.
The Huffington Post revealed that Wells Fargo, who has been field testing a monthly debit card fee in select places throughout the country over the past several weeks, has decided to burden their customers who use a debit card for purchases with a similar fee, $3 a month starting this fall. Chase, who also field tested monthly debit card fees, decided against implementing one for the time being. Smaller lending institutions like SunTrust and Regions Financial have both chosen to impose debit card usage fees upon their customers. People using their debit cards at the ATM will not be charged the monthly fee, it is only enacted when their debit card is used to make a purchase.
Amidst all of these changes, now is an opportune time for fee-conscious consumers to apply for a credit card to use for purchases in lieu of a debit card. If used responsibly and the balance is paid off in full at the end of each billing cycle, a credit card won’t incur a monthly usage fee.
Citibank, who announced that they will not be charging their customers a monthly fee for making debit card purchases, is instead restructuring their fee structures for checking accounts along with raising minimum balance requirements.