Bank of America and several other American banks such as J.P Morgan Chase & Co announced a monthly debit fee in late September. The new five dollar monthly fee will be effective for all debit card purchases in the coming year. Due to new regulation costs established by the government, banks are seeking out for alternative ways to minimize their loss. The new regulation is estimated to cause a 6.6 billion loss in revenue a year for banks in America.
With the U.S. economy heading towards another recession, this new expense will only pave the path to many future protests. In addition, this is an extremely poor time for banks to charge an additional fee that was once free of charge. Aside from a growing unemployment rate, consumers will now be even more reluctant to spend their income. Once this fee is in effect, many customers will simply cut off their debit cards and resort to purchasing with cash or credit cards. Other bank companies will take advantage of this opportunity to advertise on their fee-free debit cards. In the end, Bank of America will lose its customers as consumers will switch to other substitutes.