Debit Card Fees!
Most of us are now aware that by using our debit card for purchases we could be subjected to a fee. Typically speaking bank changes and regulations don’t hit mainstream media as hard as this story did. Everywhere you looked you saw headlines that Bank of America was going to start implementing a $5 fee for debit charges in 2012. Interestingly enough it was Bank of America who took the heat for it, yet many other banks have already started executing the fee. SunTrust, Wells Fargo, Chase and Regions Bank are among them.
The question is why has this all the sudden happened? Debit cards have widely been accepted for payment with no fees for as far back as I can remember. Let’s explore this question. A federal regulation known as the Durbin Rule went into effect on October 1, 2011. This regulation limited the fees that banks could charge on merchants when a cardholder uses their debit card to make a purchase. The maximum fee that a bank can charge now is $0.24 per transaction. The previous fee was $0.44. This decrease will cost banks billions of dollars in revenue annually. According to the Nilson Report in 2009 the revenue generated from the debit card fees was $19 billion.
On the contrary, there is no cap on fees that banks can collect from credit cards. Therefore, banks are hoping that due to the fee most clients will resort to their credit cards. Be aware that even if you use your debit card as “credit” you will still be charged the fee.
Banks have all stated though that by using the ATM with your debit card you will not be charged a fee. The problem that arises from this is lack of planning. Many of us have become accustomed to not having to carry cash. If we go somewhere and need to make a purchase we swipe our debit cards at no fee. There are ways to waive this fee with some banks, depending on what type of account you have. Please check with your specific bank to find out their terms.
Account holders were recently hit with fees for checking accounts as well. Over 60 percent of checking accounts are no longer feeless. Combining those monthly maintenance fees with the debit card fees many people are looking at monthly charges in double digits. With the downturn in the economy this is not feasible for many Americans. There has been an outrage from accountholders across the U.S in regards to this new fee structure; however this has not caused any banks to change policies.
