Bank of America Announces $5 Monthly Debit Card Fee

Bank of America recently announced it will begin charging $5 monthly fees for customers who make debit card transactions. Following a string of banks that have flirted with fees for debit-card use, the bank plans to begin charging its fee at the beginning of next year.

Bank of America First to Fully Implement Debit Fee

A number of banks, including Wells Fargo and Chase have discussed implementing debit-use fees. Wells Fargo even has gone as far as establishing a $3 per month debit card fee that is set for implementation on Oct. 14, but it is only in a test phase and will only affect Nevada, Washington, Georgia, Oregon and New Mexico.

Bank of America is the first to bypass the test outright and begin charging a fee, which many say is in response to the implementation of new rules limiting the revenue banks will be able to receive from merchants.

Beginning this weekend, a cap will take effect that will limit the fees banks can charge retailers every time customers swipe their debit cards. While banks used to charge an average fee of 44 cents, they can now only charge a maximum of 21 cents, leaving many to find creative ways to make up the difference.

BofA Customers Only Charged When Card Is Used

So here’s how the card fee will work: If you choose not to use your debit card in a month’s time, Bank of America will not issue any charges. However, whether you use your card to make one purchase during a month or 30, you will pay $5 per month starting in 2012. The bank was clear that you will pay whether you select “debit” or “credit” at the point of sale.

If you choose to withdraw money at an ATM via your debit card, you won’t have to pay the fee. It’s only to be assessed when making purchases through a merchant’s credit card machine. Also, Bank of America has chosen to select certain customers with premium accounts to be exempt from the charge.

Bank of America spokeswoman Betty Riess told CNN Money, “The economics of offering a debit card have changed with recent regulations,” adding that customers will be notified of the change at least 30 days prior to the new fee taking effect.

But Senator Dick Durbin (D-Ill.) disagrees with Bank of America’s new fees. “After years of raking in excess profits off an unfair and anti-competitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to customers,” he said in a statement. “It’s overt, unfair and I hope their customers have their final say.”