Bank of America customers beware: Your debit card is about to get a lot more expensive. The bank intends to start charging many customers $5 a month if they use their debit cards, in what the company says is an effort to offset new federal regulations limiting the fees it can charge merchants accepting the cards. “The economics of offering a debit card have changed,” a bank spokesperson tells Bloomberg.
The Dodd-Frank Act caps the “swipe fees” debit card issuers can charge merchants at 21 to 24 cents, starting Oct. 1. The formula previously used averaged 44 cents per transaction, and the change could skim $8 billion off the biggest US banks' annual revenue. Bank of America said the change won’t affect ATM rates, and will not hit premium accounts or cards tied to its Merrill Lynch wing.