Bank of America customers were not happy to learn that they will be charged a $5 monthly fee for shopping with their debit cards starting in early 2012 (this is whether they use the debit or credit option). Not that this makes the situation any better but there is an explanation for it. Actually, the explanation might make you more upset if you're a Bank of America customer...
Bank of America is making this move partially because of a new federal regulation starting tomorrow (Oct. 1) that will begin limiting the cut banks can take from merchants at the point of sale, according to The Christian Science Monitor. Bank of America is expecting the new lower rate to reduce the revenue that those merchant fees currently bring to the bank. In 2009, those fees amounted to $19 billion in revenue.
Translation: Bank of America is shifting a part of the fee obligation from merchants to customers.
"After years of raking in excess profits off an unfair and anti-competitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to its customers," Sen. Dick Durbin (D) of Illinois told CSM Thursday. "It's overt, unfair and I hope their customers have the final say."
The only customers who won't have to offset the lost revenue are those with premium accounts (accounts opened with $10,000 or more). So once again, it sucks to not be rich. Thanks America. Sigh.
Bank fees have been changing rapidly in recent years. In 2009, 76 percent of checking accounts in the US were free. This year, that number is only 45 percent, according to a study by Bankrate.com. ATM fees are up an average of $0.07 from last year, and average overdraft fees went up $0.36 in the same time. However, even with these new debit card fees, customers aren't likely to start searching for a new bank. An Associated Press-GfK poll found that if debit card users incurred a $5 fee, 66 percent said they would just change their payment method.
Translation: Because people lie down and take it, we continue to get raped. Double sigh.
But anyway, a little birdy told us that TD Bank hasn't started charging...yet. We're just putting that out there. Do what you want with that information.