Update: Reuters is reporting that even Bank of America is scaling back on its $5 debit card fee by giving customers more ways to avoid the charge.
Bank of America, which caused an uproar last month when it announced it would introduce a $5 monthly debit card fee, might be feeling a little lonely.
According to the Wall Street Journal, several major banks, including Chase, PNC, Citigroup, U.S. Bancorp and KeyCorp, now say they won’t assess a debit card fee.
A source familiar with Chase plans told the Baltimore Sun that the bank tested a series of a la carte fees in Wisconsin and Georgia starting in February. For instance, customers could choose a debit for $3 a month. But after 8 months of testing, it turned out people liked Chase’s basic total checking account where they can avoid the $12 a month fee by keeping a minimum balance. So, no debit card fee.
The furor over BofA’s debit card fees hasn’t abated.
A poll released yesterday by CreditCards.com found that two-thirds of debit card users say they will stop using the plastic if their bank charges a monthly fee.
Of course, banks likely won’t be sorry about that if consumers use credit cards instead. The whole idea of adding a fee to debit cards is to make up for lost revenue on debit card transactions. Thanks to new government rules, banks collect lower “interchange fees” from merchants when processing debit card transactions. The fee merchants must pay banks to process credit card transactions stays the same, so banks will earn more from retailers if you use credit rather than debit card.