Banks Charging Fees for the Usage of Debit Cards

Banks Charging Fees for the Usage of Debit Cards

Introduction

Because of the features they offer credit cards and debit cards turned out to enjoy a huge public attention. Where debit cards provides the flexibility and convenience of directly accessing their money in their bank accounts via ATM machines and removes the liability of going to the banks and usage of checks. However, the popularity of debit cards have suffered a little decline since banks have decide to charge fees on the usage of these cards which has given birth to various issues (Nilson report, 2012).

Thesis Statement

A number of controversies have originated since all the major banks of America are either charging or in the process of forming strategies that includes charging huge amount of money on the usage of credit cards. This has caused many serious social, economical and complexity issues to the debit cards users. Moreover, these issues need to be dealt with if the usage of debit cards is to be kept alive.

Discussion

History and Issues of the Fees Charged by the Banks on Debit Cards

Origin of Debit Cards and the Fee Charging Concept

It was in the year 1978 that the first ever debit card was issued by a bank. Because of many important beneficiaries a debit card has to offer its demand increased day by day. Since that day, moreover 30 million people have acquired the services of debit cards, according to the economy watch. Everything was going well for the banking industry and the debit card user until the dramatically economic setbacks that were experienced by countries all over the world. As a result, many countries had to change their economic policies and most of the countries did so by burdening the common men by charging unjust and irrelevant payments in the name of recovering the suffering economy (Borzekowski, 2006).

Therefore, America's banking sector adopted the same strategy and The Bank of America was the first bank that planned to charge an additional monthly fee of 5 dollar to its debit card holders. This is also encouraging some of the other major banks of America like J.P. Morgan Chase & Co. and Wells Fargo Co. etc to charge their credit card users with this fee as well. As a result, majority of the debit card users are facing a number of issues and problems while carrying and ...