And yesterday, Citizens Bank, the second largest in Massachusetts behind Bank of America, said it is cutting back on premiums it offered for debit card uses, such as cash-back rewards and points that can be traded in for gift cards and merchandise. The changes go into effect beginning Nov. 9.
Bank of America and other major banks have blamed the new customer charges on a provision in the federal Dodd-Frank financial overhaul law cutting in half the amount that banks can charge per debit card purchase, to 24 cents from 44 cents.
A study by Javelin Strategy & Research, a financial services consulting company in California, estimated the cap could cost banks $6.6 billion a year in revenue.
Bank of America officials declined to comment on efforts by its competitors to lure its customers away.
Michael Ratty, a longtime Bank of America customer, said he has stayed with the bank despite the steady introduction of new fees in recent years. But the new debit card fee, he said, could be “the last straw’’ that leads him to switch.
The South End resident said he typically uses his debit card two or three times a day, a habit that the bank had encouraged by offering special incentives for frequent use.
“It’s not about the money,’’ said Ratty, 32. “It’s mixed signals, and it’s kind of a slap in the face.’’
The debit card fee is the most recent announcement by Bank of America about changes to its fee structure. The company, which is headquartered in Charlotte, N.C., and has 2 million Massachusetts customers, offers a type of checking account that charges $4 a month for online bill payments.
Still trying to recover from the housing bust and financial crisis, the company also recently announced plans to cut 30,000 jobs.
Consumers willing to take the time and effort to switch banks may find such moves are increasingly complicated. More customers use online and automated bill-payment programs, and Bank of America offers nearly ubiquitous ATMs.
