Get ready for a new wave of bank fees. Bank of America will begin charging a $5 monthly fee at the beginning of next year for customers who make debit card purchases.
Whether you use your card for one purchase a month or 20, you will pay $5 per month starting in 2012. If you don't use your card at all, you won't be assessed a fee. And you can still use ATMs as much as you want without getting hit with the new fee.
Other banks have been flirting with the idea of introducing a fee for debit card usage, but Bank of America (BAC, Fortune 500) is one of the first major institutions to announce that it will make this a reality for all active debit card customers.
The move coincides with the implementation of new rules limiting the revenue banks will be able to get from merchants. Beginning this weekend, a cap on the fees banks can charge retailers every time customers swipe their debit cards will take effect.
While banks used to charge an average fee of 44 cents, now the maximum fee is only 21 cents. This is expected to cost the banking industry billions of dollars. The Federal Reserve introduced the cap this summer, despite protests from many financial institutions.
"The economics of offering a debit card have changed with recent regulations," said Bank of America spokeswoman Betty Riess, adding that customers will be notified of the change at least 30 days before it takes effect.
While banks used to charge an average fee of 44 cents, now the maximum fee is only 21 cents. This is expected to cost the banking industry billions of dollars. The Federal Reserve introduced the cap this summer, despite protests from many financial institutions.
"The economics of offering a debit card have changed with recent regulations," said Bank of America spokeswoman Betty Riess, adding that customers will be notified of the change at least 30 days before it takes effect.
