Bank of America’s announcement that customers would have to pay a fee to use their own money via debit cards as well as the notices other banks are putting forth about limiting debit card transactions may seem odd to many people. It almost looks like banks would lose customers with such moves.
Instead, though, big banks might actually be making themselves a bit more cash these days. When customers shift away from their debit cards, they’ll use credit cards as a replacement, and that’s likely to make places like Bank of America more profitable than ever.
Wondering how? Transaction fees on credit cards are a percentage of the purchase themselves, instead of being capped at a flat rate the way debit card transactions are. The more money you spend, the more money the credit card company makes, and that could mean the new laws just work for the big banks yet again, costing you far more in the long run.