Bank of America to charge debit card use fee
(Reuters) - Bank of America Corp plans to charge customers who use their debit cards to make purchases a $5 monthly fee beginning early next year, joining other banks scrambling for new sources of revenue.
U.S. banks have been looking for ways to increase revenue as regulations introduced since the financial crisis limited the use of overdraft and other fees.
The Dodd-Frank Act’s Durbin amendment, due to go into effect on October 1, caps fees banks can charge merchants for processing debit card transactions at 21 cents per transaction from an average of 44 cents, potentially costing banks billions of dollars.
Banks also face broader operational challenges as low interest rates and higher capital requirements hit profitability, and the sluggish economy depresses loan demand.
Other large U.S. banks including Wells Fargo & Co, JPMorgan Chase & Co and SunTrust Banks Inc are testing or planning monthly debit card fees.
“The economics of offering a debit card have changed,” Bank of America spokeswoman Anne Pace said on Thursday. Bank of America is the largest U.S. bank by assets.
Senator Richard Durbin, architect of debit card interchange fee reform, bashed the proposed monthly fee. “Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” he said in a statement. It’s overt, unfair, and I hope their customers have the final say.”
Wow, this is just…fuck.
Where do I put my money now?