Who’s to Blame for Debit-Card Charges?

Another fee?? Is anyone really surprised by the recent announcement that Bank of America and many other financial institutions have instituted another service fee? If your bank hasn’t yet jumped on the bandwagon for charging monthly debit fees, it’s probably just a hop-skip away from doing so. A la carte service fees have become a fundamental revenue vehicle.

How: Banks are now charging debits and credit swipes to some customers for card usage up to a maximum amount per month.

Why: Money is always the cornerstone for corporate America. The driving force in every for-profit organization. Money, money, money.

Because: The banks are reacting to federal regulations ( The Dodd Frank Act and Durbin Amendment ) that sets a rate cap on what retailers pay to accept debit card transactions. Before the change in regulations, banks would charge merchants per swipe and earned around $20 billion annually. No small change to them. The new cap will save merchants several billion dollars a year.

Losers: So, who’s to blame here? Banks, the federal regulators, merchants, consumers….global warming? The hits are being felt by large banks (banks under $10B in assets are not affected by the new rules) and those consumers that are using debit/credit cards with the larger institutions.

Winners: Merchants may have won this round. All the ranting and ravings at the banks for adding another fee, perhaps should also be shared with your congressional representatives. Smaller financial institutions may also gain new deposit customers as angry consumers close accounts in protest.

Cash in hand isn’t looking too bad these days. Up to $3 to $5 a month ($36 – $60 annually) for card usage…may be the tipping point. After all, that’s a grand meal for a year’s worth of card fees.

Haven’t we been paying fees for our card usage? Probably so, whether it was a hidden fee, a retailer’s fee, higher sales prices, etc., the consumers have been paying. But enough is enough!

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