The banking industry has proven once again that it is a capitalist machine that will work toward increasing revenue and disregard those it is meant to work for.
Last week Bank of America announced that it would begin charging a $5 monthly fee to customers using their debit cards. This new fee is scheduled to begin at the beginning of next year and will be implemented in certain states before charging at a national level.
Whether consumers use their debit card once a month or 20 times a month, the fee will not fluctuate.
“The bank’s decision simply reminded us all over again that we are living increasingly in a fee-littered world, where companies continually seek out new ways to nibble away at our wallets by charging for the smallest of once-free services,” Brady Dennis, a writer for the Washington Post wrote.
Bank of America’s move follows ATM fees, bank teller fees and paper statement fees.
However, Bank of America is not the only bank looking to nickel-and-dime its customers. Starting on Oct. 14, Wells Fargo will be charging a $3 monthly fee for checking account customers who use their debit cards. This will begin as a pilot in Georgia, Nevada, New Mexico, Washington and Oregon. Similarly in February, Chase bank began a $3 fee in Wisconsin.
Other banks are attempting to cut back on the debit card trend they created by eliminating debit rewards, eliminating free checking or limiting the number of debit card transactions.
Looking at the Durbin Amendment of the Dodd-Frank Act explains why banks are going to these measures to stay afloat during the financial crisis. The amendment is a regulation that went into effect on Oct. 1 which will cap fees banks can collect from merchants when customers use their debit cards. A reduction in debit card transaction fees went from $.44 to $.21, and the banks are trying to make up the lost revenue.
In Nilson Report, where industry payments are tracked, it reported that in 2009 banks collected $19 billion in fees alone.
A poll by the Associated Press found that 61 percent of consumers would find other means of payment as opposed to paying a $3 fee, and 66 percent said they too would find other payment methods if the fee was $5.
Some minor solutions of coping with the new fees added to the catalog of obnoxious fees are for consumers to bow their heads and accept paying the fee or choose to hunt for another bank. However, no longer using a debit card and switching to cash, credit or check like back in the day would work too.