Bank of America Backtracks on Debit Card Fees

Bank of America Corp., after receiving heavy public criticism for a planned $5-per-month debit card fee, is likely to give customers more ways to avoid the fee, a person familiar with the bank’s plans said Friday.

The second-biggest U.S. bank is reworking its plans as rivals Wells Fargo & Co and JPMorgan Chase & Co have decided not to charge monthly fees, ending test programs in certain states.

Bank of America is likely to allow many customers to sidestep the fee by taking measures such as maintaining minimum balances, having paychecks direct deposited, or using Bank of America credit cards, the person said.

Under earlier plans, customers might have needed balances totaling $20,000 across all their Bank of America accounts to skip the fee.

Bank of America set off a firestorm of criticism from customers, consumer advocates and politicians last month when it disclosed plans to charge customers $5 per month for using their debit cards, starting sometime next year.

The goal was to make up revenue lost to a law that slashes the fees banks charge retailers when consumers swipe their cards.

While some banks have disclosed plans to apply similar fees, many banks and credit unions decided not to institute the charge and have encouraged customers to switch banks.

Charlotte, North Carolina-based Bank of America is not abandoning the fee now and will likely include it in new account types the bank is testing in three states. The bank plans to roll out these packages nationwide next year.

The $5-per-month fee may still remain an option for customers, the person said.

The bank has said the purpose of the new account types is to provide customers with upfront pricing, instead of hitting them with penalties after the fact. Customers can pay monthly fees of between $9 and $20, or avoid the charges by keeping minimum balances, using their credit cards or having a minimum amount deposited to their account.