Posted on 03/10/2011 1:08:35 PM PST by Whenifhow
.....Your debit card may soon be denied for purchases greater than $100 -- or even as little as $50. JPMorgan Chase, one of the nation's largest banks, is considering capping debit card transactions at either $50 or $100, according to a source with knowledge of the proposal. Why? Because of a tricky thing called interchange fees. Right now, every time you swipe your debit card, your bank charges the retailer an average fee of 44 cents, which it shares with its partners. ....
And consumers would end up feeling the pain when Bank of America is forced to recoup costs "by increasing the cost of their everyday debit card transactions, limiting their payment choices, and impacting industry innovation," ..... Aside from mulling over a limit on transaction amounts, Chase is already testing $3 monthly fees on debit cards and $15 fees on checking accounts in certain states.
....
So with the Fed's proposed cap in place, banks argue they won't have the money to protect themselves against fraud. And, of course, the bigger the purchase the bigger the risk, so banks are considering limiting consumers' ability to pay by debit card.
...
But a Bank of America spokesman declined to comment on whether the bank would cap debit card purchases at $50 or $100.
...
If a cap like this does make its way into accounts across the board, consumers would be forced to write checks, withdraw cash from ATMs, or put their spending on credit cards. "The whole model on the debit card side is in flux because of Dodd-Frank," said Brian Riley, senior research director at financial services consulting firm TowerGroup.
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Bank of America, for example, announced a $59 annual fee last month for its riskiest customers -- making up about 5% of consumer credit card accounts.
(Excerpt) Read more at finance.yahoo.com ...
Expect paper money to come back strong if they do this.
These articles about higher bank charges for checking accounts and now debit cards are always about the biggest banks. Haven’t heard a word from my bank about any of this: still free checking, etc.
You can pay any bill with a Money Order. Far cheaper than what you pay for checking services when you add all the fees and BS up.
A lot of prepaid debit/credit cards are popping up all over. They are like your own mini-bank. Deposits from payroll can go directly into it, yet not to a bank.
That’s me. I’ll be TOTALLY screwed.
Of the big guys, Capital One is one of the better ones.
Chase, Bank of America and the other illegal alien coddling banks can kiss my royal arse.
Debit Card limitation? “It’s my money and I want it now!
The banks are not the culprit here. This is the (Dick) Durbin amendment to the Dodd-Frank Wall Street reform bill.
The bill, because of huge lobbying and contributions from retailers, limits debit card per-swipe merchant charges to 12 cents. The average swipe charge in the formerly free market was 44 cents. Debit swipe fees were for many banks the second largest income stream, behind only loan interest. Any private sector entity that has its revenue tampered with by the government has a right to seek to replace that revenue elsewhere, in my view.
The state of Minnesota announced it is challenging the constitutionality of this law yesterday. Ironically Target, one of the leading whiners that brought us this intervention into the marketplace, is home-officed in Minneapolis. So we'll see where this goes.
I use my debit card constantly. If they do this, a lot of people are going to blow a gasket.
I could probably save a lot of money if they made me stop using a debit card and switch back to cash. I double-dog dare ‘em to do this!
Yep. A cart full of groceries will run you more than that limit. If I can't use it for that most basic of transactions, it's useless.
My brother did a consolidation loan with BofA at what he thought would be 4.99%.
A week later the paper work came back as 14.99%.
Many smaller businesses have quit taking credit cards as payment due to the high fees. Debit cards will be next.
Those that come up with these ideas seem to think we have no choices. Well we do.
I do not need to use a ATM card to buy stuff. I can keep it to do my banking business but switch to either cash, check or credit card. They then lose the 44 cents per transaction they were getting.
>>You are free to do so, but how are you going to pay bills then?
Switch to a credit union. Direct-deposit paycheck. Leave enough in there to pay bills. Withdraw the rest.
Oil em up.
bank of america again.
if there was one bank that EARNED the right to fail it is that bank.
The interchange fees that banks charge merchants on credit card swipes is massively higher, generally a flat fee plus a percentage of the transaction fee.
That is the whole point of capping debit card transactions, to force the use of the debit card as a credit card so they can continue the interchange fee gravy train.
I always use cash only. I observed long ago that I seem to have more control on spending when using cash.
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