cards
Banks are surely feeling the crunch these days, thanks to the regulations of the CARD Act and also decreased use of credit cards by card holders. In an effort to make up for the loss of revenue, banks are looking for newer ways to ensure their profit margins do not take a hit. A number of banks have either cut down on the rewards program or introduced new fees in the recent past.
One of the major banks in the United States, JP Morgan Chase, has not only planned to eliminate the rewards programs on debit cards, but has also increased the ATM fees to $4 in the state of Texas and $5 in Illinois for non-customers.
Bank of America has decided to increase the annual fees to $59 for close to 5% of its existing credit card holders.
Most of the other leading lenders in the United States are making up for the loss by eliminating “free” checking account. Despite all these measures, banks and other financial institutions are bracing for the worst, because the Federal Reserve is debating a move to place a cap on the interchange fees on debit cards as well.
If the Federal Reserve approves the cap on these fees, then banks stand to lose close to $16 billion in terms of revenue through these fees. Ever since the customers have begun refraining from using credit cards, debit cards have become the preferred mode of purchase for card holders. Bringing about this limit will encourage banks to come up with newer ways to make up for this loss as well.
