Free checking accounts, rewards may soon be thing of the past
Due to the effects of recent legislation on the revenue streams of major banks and lenders, debit card users may soon see extra charges on their checking accounts.
Recent regulations by the Federal Reserve established a limit on interchange fees for card purchases, and new legislation allows consumers only to opt-in to overdraft protection. These changes cut bank revenue streams by as much as $35 billion in some cases.
Additionally, many new accounts are set to come equipped with higher annual fees for new customers. Some industry experts see the new charges as part of a larger move to attempt to lure more customers back to credit cards, The New York Daily News reports. This is because consumers are more likely to hold balances on these accounts and accrue interest on these payments.
Others predict debit card rewards will vanish altogether for new customers. This does not suggest a shift toward credit card rewards, as consumers may not see any improvements in this field either, the news source says.
In 2010, nearly 8 million Americans stopped using checking accounts. For some consumers this was a conscious choice; however, others may have simply been the victim of charge offs and locked out of the credit system altogether.