Bank of America announced that in order to cover profits lost they are going to start charging their customers a new fee; $5 per month to use your debit card. They join Wells Fargo (who will charge $3/month) and JP Morgan Chase in charging consumers this new fee.
From Bob Sullivan over at Red Tape Chronicles
Banks are making the change because revenue from lucrative interchange fees paid by merchants -- so-called swipe fees -- is drying up. The Federal Reserve Board issued rules in June that essential cut swipe fees in half, from an average of 44 cents to 24 cents per transaction. The new rule takes effect Oct. 1, and Bank of America has said it will lose $2 billion annually because of the change.
So B of A has decided to put that $2 billion burden onto the backs of consumers.
However, as the big banks create new fees, smaller banks see an opening to grab customers by continuing to offer free checking. If you are thinking about shopping around for a new bank here are some helpful resources for you. First check out this post to learn how to compare banks and find the hidden fees. Then if you do decide to move your money to a different bank please do it safely. Here are some tips to help you:
Step 1. Open your new bank account with a small deposit.
Step 2. Make a list of all the automatic payments and deposits that are scheduled to go in and out of your old account each month.
Step 3. If you have direct deposit, ask your employer to reroute your paychecks to your new account. Ask what date the first deposit will occur and use this date to guide you through Step 4.
Step 4. Once you know what date your direct deposits will transfer, reschedule each automatic payment or debit to come out of your new account. Make sure to ask the company what date the change will apply.
Step 5. Leave at least a small amount of cash in your old checking account for at least one more month.
Step 6. Once you are sure that all automatic payments and all direct deposits are coming and going from your new account, electronically transfer the final funds from your old account into the new account.
Step 7. Once the transfer clears in your new account, follow the procedures for closing an account at your old financial institution. Make sure to obtain written confirmation that your account is closed.