This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bank of America Will Find a Way to Charge You (Update 2)

(Bank debit fee article updated with news on Bank of America fee withdrawal)

NEW YORK ( TheStreet) - Bank of America (BAC - Get Report) has dropped its proposal to charge customers a monthly fee of $5 for debit-card purchases after furious customers threatened to take their business elsewhere .

The about turn may be a victory for Occupy Wall Street protesters .

On Friday, Wells Fargo (WFC - Get Report) announced it was canceling a test program in which it was charging debit card users $3 a month.

JPMorgan Chase (JPM - Get Report), Citigroup (C) and PNC Financial (PNC - Get Report) have also said they will not charge the fee.

But consumers' elation will be short lived.

That's because banks will simply move the cost to another area of the retail network, by killing free checking or adding fees to consumer loans, according to industry watchers.

Bank of America

Banks are seeing a potential $30 billion annual revenue loss in their payments business as new regulations restrict fee income and shrinking spreads hurt margins on checking accounts, according to consulting firm Novantas.

"The sad but honest truth is that free checking was supported by interest rates and fees. Both those options are not available to banks now," said Hank Israel, partner at Novantas.

According to Israel, the cost of providing a basic checking account is $15 to $20 per customer per month, if you factor in all costs for providing ATM and other services at branches.  

Banks previously used the fees they charged merchants to pay for the costs, allowing customers to have free checking accounts.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $17.58 0.86%
JPM $67.20 0.78%
PNC $95.99 0.50%
WFC $55.43 0.60%
USB $44.04 0.34%


Chart of I:DJI
DOW 17,820.24 +100.32 0.57%
S&P 500 2,092.06 +11.65 0.56%
NASDAQ 5,131.4460 +22.78 0.45%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs