The Bank Of America is just one of a number of US Financial institutions that are seeking to charge customers who use their Debit Cards to make purchases, beginning in 2012.
With a change that is due to commence on the 1st October 2011 under the Dodd-Frank Act Durbin amendment, the amount that banks will be able to charge merchants for processing purchases using debit cards will be capped at 21 cents per transaction, whereas the average charge has been as much as 44 cents per transaction.
While merchants will no doubt welcome the government imposed regulation of fees, consumers are certainly not going to be too pleased, with the Bank Of America planning to charge a $5 monthly fee for the privilege of purchasing goods using their Debit Card.
For customers who are feeling the pinch and already struggling financially, using Debit Cards for purchases has proved to be safer than using Credit Cards, and a better method for many than either having to carry adequate cash to cover purchases or to use checks, which are fast becoming a thing of the past.
An additional $5 fee on top of the current monthly charges of approximately $8.95 to $14 for those who are unable to maintain an average balance of $1,500 in their checking account will not go down well with customers.
With other larger financial organizations also looking at this option of charging for the use of Debit Cards, it seems a step backwards for the banking system in the USA as far as customer charges, and may lead to many moving to smaller local banks who decide not to add these charges.
This change is almost certain to lead to a shake up in the banking system and could see many customers switching banks, to the detriment of those that implement these charges.
References:
Bank Of America to charge debit card use fee – Reuters