Bank to charge for debit card use

September 30, 2011 9:52:15 AM PDT
Bank of America is going to charge customers a $5 monthly fee to use their debit cards, and the move comes ahead of major reform that goes into effect Saturday.

Legislation sponsored by Illinois Sen Dick Durbin will limit fees that banks can charge retailers for accepting debit cards for transactions. The reform is great news for small businesses, but not so much for debit card holders.

The owners of K & K Flowers in the Loop, for example, say the legislation will get them a big break on bank fees. In fact, they think they'll save about $400 a month.

But their gain is a loss for Bank of America customers. Because of the regulation, Bank of America just announced it plans to charge customers about $60 bucks a year starting in 2012, to use debit cads for purchases. Durbin says that's a low move since banks rake in excess profits off an unfair system.

Tilisha Tucker, a working mother of three, may pull the plug on Bank of America.

"I might be definitely looking into a different bank," Tucker said. "Any little thing -- anything counts. It can be a dollar, penny, anything counts."

Other banks may follow since Bank of America is the largest bank in the nation with 57 million customers. JPMorgan Chase, Sun Trust and Wells Fargo are testing $3 debit card fees in some markets.

"Fees for debit cards usage is just something we're going to see a lot more of in the weeks and months ahead because banks are going to be making a lot less revenue every time a consumer swipes that card," said Greg McBride, senior financial analyst,

Other customers say they'll find ways around the fees.

"Go to your bank and pull out cash instead of using the debit card. You'll be saving money," said debit card user Mark Kifarkis.

Bank of America customer Kathryn Gardner says she never used a debit card, saying, "Never liked it. Never use it. I don't trust it."

PNC, Citibank and U.S. Bank all say that for now, they will not charge a fee but experts say that this could become the norm -- all for that convenience of using a debit card.

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