Bank of America plans to start charging customers a $5 monthly fee for using their debit card for purchases.
Bank of America to Charge $5 Debit Card Fee
Bank of America plans to start charging customers a $5 monthly fee for using their debit card for purchases.
The fee will be rolled out starting early next year.
A number of banks have either rolled out or are testing such fees. Bank of America’s announcement carries added weight because it is the largest U.S. bank by deposits.
Anne Pace, a Bank of America Corp. spokeswoman, said Thursday that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers won’t be charged if they only use their cards at an ATM.
The fee will apply to basic accounts and will be in addition to any monthly fees customers are already being charged. For example, one of the bank’s basic accounts already charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.
A fee for using debit cards is still a novel concept for many consumers and was unheard of before this year. But there are signs it will soon become an industry norm.
SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., notified customers this summer that it will charge a $4 monthly fee starting next month.
Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.
The debit card fee isn’t the only unwelcome change for checking account customers are seeing either. The banking industry has been raising fees and scaling back on rewards programs as they adjust to new regulations that will limit traditional revenue sources.
Starting Oct. 1, a regulation will cap the fees that banks can collect from merchants whenever customers swipe their debit cards. Those fees had generated $19 billion in revenue for banks in 2009, according to the Nilson Report, which tracks the payments industry.
There is no similar cap for the fees that banks can collect from merchants when customers use their credit cards, however. That means banks may increasingly encourage customers to reach for their credit cards, reversing a trend toward debit card usage in the past several years.
Pace said the new debit card fee will be rolled out in stages starting with select states in early 2012. She did not say which states would be affected first.
Bank of America shares rose 9 cents, or 1.5 percent, to $6.25 in afternoon trading.
DaasTorah
Another reason to use a local credit union.
oh canada!!
welcome to canada. all the banks here have been doing that for years!! ay!
USAA
Sign up with USAA. You do not need to be military to take advantage of their great service and zero fees. They also rebate ATM surcharges (yes those annoying $2-$5 charges when you take out cash from an ATM that’s not of your bank). You will not be disappointed, while they don’t have a physical location that you can walk in to (they’re based out of San Antonio, TX) you can make deposits online (with a scanner or from your phone) or deposit it in a local account and transfer funds. All free. USAA.com
It’s only been a year or two that they opened the banking service to the public. If you do have a direct relative that served in the miltary you are eligible to take advantage of their other services: car insurance, home mortgage/car loan and a lot more. But again the banking side is open to all. No I do not work for them just a happy client of thiers.
Credit Union?
Do you know of a good credit union around here?
Adam
Thanks for the tip for USAA! It looks entirely solid.
I’m currently inquiring as to whether or not they allow non-military customers to qualify for the phone banking, as the fine print on that suggests that it may not be so.
to USAA
don’t forget to mention their great deals on car rentals. with avis and budget you could rent from 21, and best of all; for bochurim 18-20 you can actually rent with hertz for NO UNDERAGE FEE what a Mechayeh!!!