November 4, 2011
By Kevin Cokely
Big banks are backing off plans to charge customers to use debit cards.
Several have now dropped their plans altogether, including Wells Fargo and Chase. Bank of America is reconsidering its plan to charge debit card users $5 a month and may waive the fee for more customers.
"Bank of America was stuck between rock and a hard place," said Mike Davis of Southern Methodist University's Cox School of Business. "They tried to generate fees to pay for the debit cards, but consumers just fought back."
Bank of American is said to be still working on the revisions, but customers who have the bank's credit cards, use direct deposit or keep a minimum balance would likely see the fee waived.
"The problem is, debit cards are expensive," Davis said. "They're expensive for the banks to offer, and the banks have to make some money on them one way or another, so the banks are desperately trying to figure out a viable revenue model."...