What Durbin's Amendment Means for Your Debit Card Use

We’ve been discussing banks, credit unions and banking regulations quite a bit here lately. On theme, Debbie from MyBankTracker.com submitted an informative guest post on the subject of the Durbin Amendment and its impact on debit cards. You can learn more about Debbie immediately following the article.

You’ve probably heard about new debit card fees banks are charging or planning to charge their customers for debit card use.  Bank of America is leading the pack with plans for charging customers $5 a month for debit card use anyplace other than the ATM.  Other banks are predicted to follow suit – but why the sudden increase in fees?

The Durbin Amendment

Durbin Amendment is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and went into effect on October 1st.  It changes the limit of swipe fees banks charge merchants when they accept debit cards as payment instead of cash.  Previously, banks could charge merchants up to 45 cents per debit card transaction; but The Durbin Amendment currently limits the swipe fee to about 22 cents per transaction.

Bank Response to Debit Card Fee Swipe Limits

Banks felt this change would cause them to lose 50% of their revenue from debit card transactions, and began looking for ways to recover from that loss of income.  Bank of America intends to add the $5 monthly debit card fee, but other banks are talking about changes to checking accounts and debit card rewards programs in an effort to recover their lost revenue. 

According to research conducted by MyBankTracker.com on the changes to debit card rewards programs, the following banks reported:

  • Chase Bank: ending the rewards program it maintains with Continental Airlines
  • Bank of America: no changes to the US Airways rewards program  
  • Wells Fargo: ended new enrollments to their rewards program on March 20th
  • Wachovia: ended program March 27th
  • Citigroup: ended rewards program enrollments on June 10th
  • JPMorgan Chase & Co: ended enrollments on July 20th

What Should You Do About Bank Changes?

Take a look at how your current bank is responding to The Durbin Amendment.  Will they keep their reward programs for checking accounts and debit card use or are they canceling them? 

Change banks: If you currently have a free checking account with a debit card you use frequently and your bank is looking to add a monthly debit card use fee and/or cancel the rewards program – you may want to consider looking at a smaller bank or a credit union.  Many online banks are not reacting to the changes and will continue offering debit cards for free.

Stop using debit card: Alternatively, you can continue with your existing bank even if they charge a debit card fee and simply stop using your debit card for making a purchase.  Write a check instead.  Consider using a credit card for each individual purchase throughout the month and then pay it off in full when the statement comes – or send your credit card account extra money to get a ‘credit balance’, and use your credit card like a debit card. (When the money is gone, stop spending until you send more!)

Debbie Dragon is a financial writer for MyBankTracker.com, a site that helps consumers compare savings accounts, CD rates, and home equity loans to make informed banking decisions and save money.


  1. I almost never use my debit cards any way, but all of these changes have made it so there’s no chance I’ll ever use those cards anywhere but an ATM. I use my credit card for everything and then just pay it off in full every month. No fees, no interest, and good rewards. I don’t have any desire to pay someone to access my own money.

  2. Timely article. I recently posted on the same topic as well. Steps to change bank account. I am not at all willing to pay for banking. Our money being at bank is enough for banks to earn interest out of it.

  3. I use USAA Federal Savings Bank, based out of San Antonio, Texas. The do not charge ATM fees and they refund up to $15 each month of other people’s fees. They have no checking account fees, no debit card fees, and offer a solid promise on military values not to institute them.

    While some of their services, like auto insurance, are only available to the military or veterans, the bank is open to all, as it is FDIC insured.

  4. Citi sent me a letter saying rewards for purchases were going away. I can still earn rewards through using the card (a certain set amount if I meet a certain usage condition).

    It doesn’t mean much to me. Like Penny, I just charge it, pay it, and collect.

  5. I have two accounts with Chase:
    a business checking
    a personal checking
    both are free as long as I use my debit card 6 times a month on the business account, I hope that stays the same.

    I also have two savings accounts at TD (they are my kids accounts,)
    and I have two savings accounts at ING (these are where I put my tax and insurance money each month until the bills come due once a year.) These have no fees at all.

  6. Great post on a number of somewhat underhanded changes. Completely agree — if your bank wants you to pay them to hold onto your money and invest it, check out their competition.

    I also personally buy everything with a credit card and pay it off monthly for my cashback, but I’m more than a little bit conflicted over this — my cards are subsidized by the CC’s business model of taking advantage of people.

  7. Banks are as fragile as ever so why do they insist on making it impossible to want to do business with them? Either they believe their own hype about being too big to fail or they’re pulling out all the stops in preparation of…

    My biggest concern is that credit unions will follow suit. We either need a “bank” that truly is for the people (with realtime member voting on alk important administrative decisions) or go back to buying only what you can afford and stashing cash in floorboards.


  8. I also use the credit card with discipline and pay it off each month and I’m glad I do, but I was always curious what companies would do if you paid them extra and used it like a debit card. Do you think companies would be ok with that?

    • From wiki:
      The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) is a federal statute in the United States that was signed into law by President Barack Obama on July 21, 2010. The Act implements financial regulatory reform sponsored by the Democratically controlled 111th United States Congress and the Obama administration. Passed as a response to the late-2000s recession, the Act was touted as the most sweeping change to financial regulation in the United States since the Great Depression.

      The law was initially proposed on December 2, 2009, in the House of Representatives by Barney Frank, and in the Senate Banking Committee by Chairman Chris Dodd. Due to their involvement with the bill, the conference committee that reported on June 29, 2010,[1] voted to name the bill after the two members of Congress.

      The “Durbin Amendment” is a provision in the final bill aimed at debit card interchange fees and increasing competition in payment processing. The provision was not in the House bill; it began as an amendment to the Senate bill from Dick Durbin and led to lobbying against it.

  9. I bank with Chase and recall a notice that one cannot “over pay” on their credit card, so, no balance of available funds. I am going to review my accounts and fees with Chase… I have a feeling I’ll be switching banks soon.

  10. if a merchant is paying less interchange fee for the debit card transaction compared to credit card then what is the benefit for the consumer

  11. What every man needs, regardless of his job or the kind of work he is doing, is a vision of what his place is and may be. He needs an objective and a purpose. He needs a feeling and a belief that he has some worthwhile thing to do.”

    Joseph M. Dodge quotes