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Coming Soon: Bank Fees, Bank Fees and More Bank Fees

For nearly a year, a battle has been raging between banks and retailers. It appears that banks have lost [3], and on July 21, 2011, a 12-cent cap on debit swipe fees will be implemented. Last year, Congress passed a law that included, among other things, a cap to debit card swipe fees. These are the fees, averaging 44 cents a swipe, that retailers pay when you use your debit card. Retailers, of course, would like to save the money (whether or not they’ll pass the savings to you the customer is a completely different question). Banks, on the other hand, stand to lose billions in revenue. As you might imagine, they’re not happy about this development — and many are figuring out how to replace all that lost revenue.

For consumers, this is likely to mean more fees.

Update: At the eleventh hour, the Fed has provided a sop to the banking industry. The swipe fee limit has been lifted to a base fee limit of 21 cents, with the ability to tack on 0.05 percent to cover the costs of fraudulent charges. And, the new fees will now be in effect on October 1, 2011, rather than July 21. You can read more from the Federal Reserve [4].

Here Come the Bank Fees

Indeed, some of the major banks are already field-testing higher fees in different areas. Chase tested out $5 ATM fees in at least one state. Bank of America has been rolling out a tiered checking account system with fees at different levels. My own primary bank (Key) is instituting activity requirements. If I don’t engage in a certain number of transactions using my bank account each month, and if I don’t have a minimum balance to offset my lack of activity, I could be charged a fee.

Now is the time to be on the look out for correspondence from your bank. Watch for notices that the following fees might be added to your account:

I’m sure that I’ve missed a few, as well. In any case, it is quite likely that fees are coming. And online banks may not be exempt. We’ve grown used to online banks as being a refuge from fees. However, with the recent purchase of ING Direct by Capital One [6], many are wondering what could be next — and whether these big banks will let online banks operate as they have in the past.

Will Your Debit Card Purchases Be Limited?

Another option that some banks are reportedly considering placing a limit on debit card transactions [7]. JPMorgan Chase is considering placing a limit on debit card transactions, amounting to $100 — or even only $50. This means that if you had a larger purchase, you would have to use a credit card (if you didn’t use cash). With the credit card use, transaction fees wouldn’t be limited to 12 cents. Indeed, many transaction fees with credit cards are charged as a percentage of the transaction amount. Forcing you to use a credit card on larger purchases would help banks get around the debit swipe fee cap.

No matter how you slice it, changes are likely coming. Your best bet is to pay attention to the changes happening, and be prepared to move your money to another bank if necessary.

(Photo: Neil T [8])