Consumers eager to reduce debt may soon find that they have more difficulty doing so because of major changes to the lending industry brought on by the implementation of new rules for debit cards.
In an effort to recoup revenues that may soon be lost to a limit on debit card transaction fees, many of the nation's largest financial institutions are now adding charges and penalty interest rates to most credit and debit accounts, according to a report from CNN Money. For example, Bank of America recently announced it would begin implementing a penalty interest rate of nearly 30 percent on delinquent credit card debt, in some cases after just one missed payment.
JPMorgan Chase, meanwhile, is considering imposing a limit on the total value of a debit card purchase, the report said. The major bank has weighed restrictions of either $50 or $100 for any purchase on this type of account.
The proposed rule, which cuts debit card transaction fees by about 70 percent of the current average, has not yet been implemented by the Federal Reserve Board.