Yesterday, one of America’s largest banks announced a new and highly unpopular fee for its customers: a monthly charge for the use of its debit card.
Bank of America customers will now have to pay $5 per month just for the ability to use a debit card at retail outlets. The new policy will take effect next year, and it looks like it will hurt primarily low- to middle-income families because it will apply only to those with basic accounts and lower balances. The Los Angeles Times reports customers can avoid the fee if they have, “… for instance, a BofA mortgage or a combined $20,000 in all their accounts at the bank and at Merrill Lynch & Co., its Wall Street investment unit.” Another way to avoid the monthly fee is to use your debit card only at ATM machines.
Some customers say they plan to boycott the bank, while others are frustrated but say it’s just too difficult to move their accounts elsewhere. The reason for the new fee? According to The Atlantic associate editor David Indiviglio, it’s because, “Congress acted to cap the debit fees that banks could charge retailers last year, and banks are reacting by directly charging their customers a portion of these lost fees to make up the difference.” He thinks Congress may have “killed” the debit card.
Other banks already charging fees for using debit cards include SunTrust ($4 per month) and Regions ($5 per month). It is expected that other banks will follow the move as well, including JP Morgan Chase and Wells Fargo.
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