Customers at Bank of America will soon be charged $5 per month for the right to carry a debit card. According to the company the new charge is an effort to offset federal regulations which has limited the amount banks can charge customers for accepting the cards.
A bank spokesperson tells Bloomberg:
“The economics of offering a debit card have changed.”
The announcement comes after the Dodd-Frank Act caps debit card fees at 21 to 24 cents per transaction swipe as of Oct. 1. Under the old structure a merchant could be charged up to 44 cents per transaction.
Under the new debit network structure banks are expected to lose $8 billion in annual revenue.
In the meantime Bank of America representatives say ATM rates (which are already astronomical) will not be touched and their premium accounts customers within their Merrill Lynch division will also avoid fees.
Recent monthly charges for “free checking” accounts have been criticized for their lack of protection for poor customers who often can not afford the fees charged by their institutions, while minimums upwards of $1,500 or more to avoid fees are often unattainable.
In the meantime consumer protection agencies are urging customers to open accounts at smaller banks and credit unions where customers are not typically being gauged by increasing and unnecessary fees at every turn.
Have you switched to a different bank recently because of all the new charges your “big” bank has began charging? Share your stories with us and make sure to name the bank that’s increased fees.