Citibank Latest to Add Customer Fees
Citibank is next in the line of banks to add new fees.
Customers were outraged last week when Bank of America Corp. announced an impending $5 monthy charge for debit card users, and now Citibank is alerting its debit card holders that they will be charged an extra $15 per month.
Citibank is also imposing fees on checking accounts, and customers will face surplus charges if their balances dip below $6,000.
Citibank's retail banking chief, Stephen Troutner, told the LA Times that customers are being notified of these new fees, which will go into effect in December.
Bank of America kicked off the trend when they announced Thursday that customers will have a $5 monthly fee starting early next year.
Bank of America spokeswoman, Anne Pace, stated Thursday that customers will only be charged the fee if they use their debit cards for purchases in any given month. Customers wont be charged if they only use thier cards at an ATM.
This fee applies to basic accounts and will be added to all existing montly service fees.
Other banks such as Chase, Wells Fargo and Suntrust are also testing monthly debit card fees.
But there are more changes to the monthly statement. The bank industy is raising fees and ascending back on reward programs as they alter new regulations that will limit traditional revenue sources.
Oct 1st a regulation will began to cap these fees, allowing banks to collect from merchants whenever customers use their cards. According to the Nilson Report , in 2009 fees generated $19 billion in revenue for banks.
This charge may influence customers to revert back to using their credit cards, reversing a trend toward debit card usuage in the past years.
An increasing reliance on credit cards would be particulary benefical for Bank of America, which is a major credit card issuer said Bart Narter, a Bank Analyst with celent, a consulting firm.
Bank of America debit card fee will be effective in early 2012 but won't affect all customers. The largest bank in the nation will choose a few states to test the new fee. The company did not release which states would be affected first.