BALTIMORE (WJZ)– Paying for the privilege to spend your money. That’s what the nation’s largest bank is asking customers to do. Bank of America is going to start charging a $5 monthly fee to use your debit card, and other banks could soon follow.
Denise Koch has more.
Bank of America’s customers did not exactly welcome the news of the debit card fee.
“I think it’s absolutely crazy,” said Bob Celestin, an entertainment lawyer. “It’s ludicrous. I mean, at the end of the day, they charge us all these other fees. This is ridiculous.”
Bank of America joins Sun Trust in initiating fees for using a debit card. Wells Fargo and Chase are also testing the idea as bank fees continue to climb to record levels.
The average fee for using an ATM, if you’re not a bank’s customer, is now a record $2.40, according to bankrate.com. And the average fee a bank hits you with for a bounced check is now $30.83, also a new record.
“I would say the era of free checking has gone the way of the dinosaur,” said Adam Levin of credit.com.
Adam Levin of credit.com says the banks are trying to recoup losses from the Card Act, which limited their ability to raise rates and charge overdraft fees.
This weekend, another new regulation takes effect that limits the amount a bank can charge merchants for debit card purchases, which now stands at 43 cents.
“And the Federal Reserve, empowered by the Dodd Frank Act, has actually reduced that now to approximately 23 cents a transaction,” Levin said.
The bank says “the economics of offering a debit card have changed” with the new regulations. Bank of America also has to offset the cost of billions of dollars in bad mortgage loans.