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Bank of America is preparing to charge $5 a month for debit card users starting early next year.
If you're a customer of a major financial institution, there's good news and bad news.
The good news is that since the passage of stricter financial regulations, banks can't charge as much in overdraft fees. The bad news is that those fees were a huge source of revenue.
So Bank of America has announced a new fee. Beginning early next year, customers will have to pay $5 per month to use their debit cards. A Bank of America spokesperson says, "the economics of offering a debit card have changed." Not a B of A customer? Many of the large financial institutions including, Wells Fargo, JP Morgan Chase and Sun Trust Banks are considering new charges on the convenient and often used piece of plastic as well. Citibank customers, however, need not fear. The head of banking products for Citi's U.S. consumer bank told Reuters that the fee would be "a huge source of irritation" to their customers.
Is $5 a reasonable amount to pay for the convenience of being able to access your checking account to buy goods and services almost anywhere? Or is $5 too much to pay for something that used to be free? Did Citibank get it right? Is it a huge source of irritation? And if so, will you stay with your bank?
Pedro Morillas, legislative director of CALPIRG, California Public Interest Research Group
Richard Hunt, president of Consumer Bankers Association, a trade group