FROM CNN's Jack Cafferty:
One of the largest consumer banks is thinking about putting its customers on a budget. According to a new report from CNNMoney.com, JPMorgan Chase is considering capping purchases you make with a Chase debit card at $50 or $100.
That's because new laws are going into effect this summer as part of Wall Street reform legislation that will limit how much a financial institution can make off your debit purchases.
Right now banks charge merchants something called an interchange fee every time you use your debit card. Those fees bring in about $16 billion for the banks each year and about $0.44 for each purchase you make. If the new limits take effect in July as scheduled, the banks would make just $0.12 per transaction. So being the crafty creatures that they are, they have decided if they limit your purchase amount, it will force you to do more transactions, and presto – they don't wind up losing a dime. Not exactly reform from the consumer's point of view.
Banks say the higher fees are necessary to cover the costs associated with debit cards. So they are playing around with some options:
Bank of America and Chase both say they are testing out adding monthly fees to checking accounts – up to $15 a month in some states if you're a Chase customer. Chase is also floating the idea of $3 monthly fees for just owning a debit card; and they may also consider that cap on individual debit card purchases.
Representatives from HSBC and Wells Fargo declined to comment on plans to add fees to their debit accounts. A Citi spokesman says the bank does not have any plans for additional consumer fees at this time.
Of course, the bank and credit card lobbyists are fighting this tooth and nail – and a new bill being introduced this week in the Senate by Democrat Jon Tester of Montana will try to delay those fee limits being put on banks. However it sorts itself out, be assured of this: The banks will get theirs.
Here’s my question to you: Should banks be able to set spending limits on debit cards?
Interested to know which ones made it on air?
Cliff in East Rockaway, New York:
At some point, bank fees become consumer friendly. When cash is used to avoid bank debit or credit card fees, purchases will be made more judiciously and the savings rate may well go up. Banks will be left devising alternative ways to gain revenue.
Stella in New York:
The banks will do as they please. If they had their way they would stamp "unlimited" on all cards. They won't lose a cent. That's what you and I are here for: to pay their bills.
Dariel in Santa Rosa, California:
Only if they want to lose their customer base. Credit Unions and small local banks should be considered, as a more honest and transparent place to park your assets.
Steve in Nashville, Indiana:
We could sure use an alternative to banks but setting limits on debit cards is like setting limits on checks. If there's money to back it up how dare they say you can't use it. Can you spell credit union?
Rick in Detroit:
No. This is another effort by the big money bankers to blackmail the government into allowing them to extort money at random while paying themselves multimillion dollar a year salaries and bonuses like they did with the TARP money a couple of years ago. Maybe the Federal Reserve should accept personal savers and issue government debit cards and tell the Wall Street bankers to take a hike.
Used wisely, debit cards are incredibly convenient, and now there are even smart phone apps for them. Between banks that are more concerned about profits and bonuses than service, and conservatives that have out of thin air developed a sense of fiscal responsibility, the only thing I've left to say is that it must be Thursday. I never could get the hang of Thursdays.
Kevin in Albuquerque:
Maybe it's time to use the Shoebox Bank, no lines, no waiting, no fees and no slips to fill out.