Bank Of America Latest To Add Debit Card Fee

Many Bank of America customers will have to start paying a monthly fee to use their debit cards next year. The fee won't apply to customers who only use their cards at ATMs or to premium customers. But for everyone else, it'll be five dollars. Banks have started imposing new fees on services that were previously free to make up for losses they expect from regulatory changes.

Copyright © 2011 NPR. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required.

DAVID GREENE, Host:

NPR's business news starts with new fees when you use a debit card. Bank of America says it will start charging many of its customers a monthly fee for using their debit cards. The move is an attempt by the bank to make up for the revenue it lost when the Federal Reserve capped what banks could charge merchants each time a card was swiped. NPR's Jim Zarroli reports.

JIM ZARROLI: Bank of America said it will charge $5 a month or $60 a year for customers who use their debit cards for purchases. The fees will take effect next year. The move will effect customers with plain vanilla checking accounts but not premium customers like those whose accounts are linked to brokerage services. The move comes in response to a new Federal Reserve regulation that takes effect in October.

Until now, big banks could charge merchants hefty fees when their customers made purchases with debit cards. But Greg McBride of Bankrate.com says the regulation capped those fees and banks are trying to recoup the lost revenue by charging their customers more.

GREGORY: MCBRIDE: Starting Saturday, there's a change to how much money banks make whenever a customer swipes their debit card. The revenue banks get from merchants is going to be cut by roughly half and the consumer is getting stuck with the bill.

ZARROLI: Bank of America's announcement carries special significance because it is the country's largest bank by deposits. Several other banks are also charging debit card fees - they include Sun Trust and Regence Financial. Wells Fargo and Chase have begun charging the fees on an experimental basis in some markets. But Citigroup says it has no plans to do so. Jim Zarroli, NPR News, New York.

Copyright © 2011 NPR. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to NPR. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.