Steven Stark, COO for A New Horizon Credit Counseling Services, a national credit counseling company, warns that “this is just one of several new charges the banks have created to overcome new regulations restricting banks’ profits in other fee areas”.
Fort Lauderdale, FL (PRWEB) October 05, 2011
A New Horizon Credit Counseling Warns Their Clients: Bank of America has announced that it will start charging customers a $5 monthly fee next month when they use their debit cards for purchases. The fees will be triggered each month if depositors use their debit cards to make any purchase, no matter how small.
Steven Stark, COO for A New Horizon Credit Counseling Services, a national credit counseling company, warns that “this is just one of several new charges the banks have created to overcome new regulations restricting banks’ profits in other fee areas”. Stark added, “These fees are in addition to any regular monthly depositor fees. Our clients are counseled to use their debit cards rather than credit cards so that they can better manage their finances.” An Associated Press poll earlier this summer found that two-thirds of consumers use debit cards more frequently than credit cards. When they were asked how they would react if they were charged a $3 monthly debit card fee, 61% said they would find another way to pay.
The fee is a result of a rule, known as the Durbin Rule, after the amendments sponsor Senator Richard J. Durbin, and is a crucial part of the Dodd-Frank financial overhaul law. The rule limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase, commonly referred to as swipe-fees. Before the Durbin Rule, the bank fees were charged to the merchant and averaged 44 cents per transaction. Senator Durbin said in a recent statement. "Bank of America is trying to find new ways to pad their profits by sticking it to its customers.”
Stark summed it up by stating, “Over the last few years, consumers have shifted their purchasing away from credit cards and have embraced the debit card as a way to control overspending; a tool that we, as credit counselors, recommend to our clients. This new fee may very likely prompt consumers to return to credit card use which is far more profitable for the banks.”
A New Horizon Credit Counseling Services is a nonprofit debt consolidation organization that has been helping consumers since 1978. For more information about their programs, contact 1-800-556-1548. They can also be found on the web at http://www.anewhorizon.org, or reached via email at slieberman(at)anewhorizon(dot)org.