Starting in 2012, customers at Bank of America can expect to pay for the privilege of using their debit cards. The $5 monthly fee won’t be assessed to people who only use their debit cards for ATM transactions, nor for people who hold a premium or platinum privileges account tied to BofA’s Merrill Lynch brokerage. Still, a lot of BofA customers are going to feel the impact of this new fee.
Other banks have been playing with the idea of instituting a debit card fee. Wells Fargo recently announced a $3 test fee in Oregon, New Mexico, Nevada, Georgia, and Washington. Chase has been testing a $3 fee in northern Wisconsin. Neither institution has yet declared whether they will implement a permanent debit card fee, though. Bank of America is one of the first major financial institutions to make this move.
What’s up with the sudden debit card fees? Banks are trying to make up for lost interchange income that will fall on the heels of new regulation placing a cap on how much financial institutions can charge merchants. The cap will be 21 cents.
Compare that to the average that financial institutions used to charge, 44 cents. Worried about losing revenue from debit cards, banks started creating new fees attached to debit cards and their use.
Whether these new fees will cause the banks to lose customers remains to be seen. However, with local institutions like credit unions continuing to offer free debit card use, a certain migration will undoubtedly take place, as frustrated customers leave the big banks.