Bank of America to Start Charging $5 Monthly Fee for Debit Card Use

Bank of America Corp. plans to impose a $5 monthly fee starting early next year on customers who make purchases using their debit cards. According to reports, the fee will be charged to bank customers with various checking accounts - but not in premium accounts - anytime they make a purchase; however, the fee won't be placed on customers who don’t use their debit cards, or for those who use it to make ATM transactions. BofA is seeking to offset losses in revenue it expects to incur from new limitations on fees that store merchants pay when customers use debit cards at their businesses. Earlier this summer, the Federal Reserve Board placed a cap on these fees, better known as "swipe fees," of up to 24 cents per transaction, effective Saturday. Which is down from the prior "swipe fee" average of 44 cents per transaction. That cap, mandated by the Dodd-Frank financial regulation legislation, will apply to banks with at least $10 billion in assets. BofA previously warned it expected the fee-caps to wipe out $2 billion in annual revenue. The industry as a whole reportedly will lose up to $8 billion per year from the caps. The move by BofA follows other banks that have introduced debit card fees. Wells Fargo & Co. will charge a monthly $3 fee for debit and ATM cards in various states beginning in October if customers use the cards to make a purchase under a pilot program.