-Submitted by David Drumm (Nal), Guest Blogger

Bank of America is leading banks all across the country in instituting new monthly fees for customers who use debit cards. BoA will start charging customers $5 a month while Wells Fargo and Chase are testing a $3 a month fee, Regions a $4 a month fee, and SunTrust a $5 fee.

These fees are a reaction to a rule, the Durbin amendment, that takes effect on Saturday that limits the fees that banks can levy on merchants when a customer uses a debit card to make a purchase. The previous fee of 44 cents per swipe will be cut to a maximum of 24 cents. This is on top of the new rules restricting overdraft fees, which went into effect in July. It was estimated that banks would lose $6.6 billion and $5.6 billion on the new rules.

Merchants are prohibited from adding swipe fees to the customer’s bill, keeping the cost of swiping hidden from the customer. The merchants just up their prices so all their customers subsidize the cost of card transactions.

Overdraft fees were also hidden. They were unpredictable, unseen, and effected primarily low-income users. Overdraft fee calculations were based on a per day usage and often designed so that a particular overdraft would trigger the maximum number of overdraft fees for that day.

Debit card purchasing was never free, it’s just the fees are now out in the open. Debit card users will be subsidized less by low-income overdraft fees and price hikes by merchants. The cost of using a debit card is now up-front and bank customers will be able to make informed choices.

H/T: Kevin Drum, NYT, CSM.