Bank of America’s joining other banks in charging customers for using debit cards. BofA plans to charge their customers a $5.00 monthly fee. Chase and Wells Fargo have been testing $3.00 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to make the fee permanent.
A Bank of America Corp. spokeswoman says 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.
Customers have been seeing higher banking fees and fewer rewards in the past year or so. The changes come as banks adjust to new regulations that will limit traditional revenue sources.
Bank of America is trying to cushion revenue losses it expects to incur from new caps on the fees merchants pay when a customer uses a debit card at their stores. This past June, the Federal Reserve Board finalized rules that will cap such fees at 24 cents per transaction, compared with a current average of 44 cents.
Bank of America has said it expects the caps, which take effect Oct.1, 2011 to erase $2 billion in annual revenue. Industry wide, the caps, which apply to banks with $10 billion and more in assets, could wipe out as much as $6.6 billion in annual revenue.
“The economics of offering a debit card have changed with recent regulations,” a spokeswoman for Bank of America said on Thursday.
The Bank of America statement added, “This new fee allows us to continue to offer the convenience of a debit card with the full range of added features customers have come to expect,” which includes fraud protection and monitoring, special savings programs, and other services.
Bank of America Corp. (NYSE:BAC) was trading at 6.34, +2.85 this afternoon.