The Affect On Consumers
The Durbin Amendment to the Dodd Frank Act, went into effect on October 1, 2011. The purpose of this legislation was to put a cap on debit transaction fees That Their processors can charge Pls merchants accepting debit or check cards for the payment of goods / services. Consequently, this stamp has put some big hurt on card issuing banks by greatly reducing the revenues They receive on these transactions. You see, every time you use your debit or credit card, the card issuing entity receives what is Referred to as the Interchange Fee. As a result of this lost revenue (reported to be in the multiple billions of dollars) most banks are looking for, or already have, initiated or eliminated fees other rewards on these cards to make up for the loss.
To give you an example, Bank of America has Announced That it Will be charging customers a $ 5 monthly fee for the use of debit cards. Now there may be some other Various fees or the possibility of the elimination of Those Certain fees for deposit levels, for example. But, let’s just use That $ 5 figure for a minute. Would this fee levied to your account, cause you to personally stop using your debit card or look for another bank to do business with? For me, while I Certainly banks do not like paying more money than Necessary to use MY MONEY, but let’s be realistic here. I use my debit card for most transactions whether it be for gas, food, entertainment of whatever. And, the between my wife and I, We Certainly rack up at least 50 debit transactions a month. So, this $ 5 fee would come to $ .10 each. Since I utilize my Quicken and log all transactions each month, I’m more than willing to pay a $ 5 monthly fee for this convenience Continued. The reports I am Able to generate, for budgeting and tax purposes, are of great help to me. So, will from monthly fees stop me from using my debit card …. not likely, Unless it gets more expensive than the benefits I currently receive.
This is Meant to Durbin Amendment Reduced fees to merchants for processing debits. This reduction, legislators hope, Will translate into reduced prices for goods and services passed on to customers. If this proves to be anything like what happened in Australia in the 1990′s, Pls They capped debit interchange fees, Will it have an effect Opposite. In Australia, debit rewards programs disappeared, issuers began charging card holders more to use debit cards (much like we’re already beginning to see here in the U.S.) and the end result was That prices went up at the point of sale. Only time Will tell what the eventual outcome will of some. In the meantime, keep your eyes open and you get complete make-Certain clarification of any fees being charged by your bank for the privilege of accessing and using YOUR MONEY.