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Bank of America pushing credit cards over debit

Bank of America is trying to move its brokerage clients who have a Visa signature debit card linked to their brokerage accounts over to credit cards with new reward point incentives.

The move is considered a reactionary step to the Durbin Amendment, which eliminates much of the company’s profit from interchange fees.

The bank is promising to allow brokerage clients to keep their existing reward points with their debit cards if they switch to credit cards and are also giving them additional points for making the switch, according to Forbes.com.

Other banks, including JPMorgan Chase, Wells Fargo, Regions Financial Corp., and SunTrust Banks, Inc., are also actively looking for ways to make up the money they will lose once the Durbin Amendment goes into effect on Oct. 1.

Many banks have already eliminated their debit card rewards programs while other banks, like Wells Fargo, are testing monthly debit card fees.

Bank of America’s strategy is aimed at boosting credit card usage because those transaction fees were not capped in the Durbin Amendment. Banks will continue to earn nearly two percent of the purchase price per swipe on credit cards, according to Forbes.com.

Card business contributes nearly a sixth of Bank of America’s estimated $11 value, Forbes.com reports, and experts predict the bank will try anything in order to move customers from debit to credit in order to minimize the profits it will lose as a result of the Durbin Amendment.
 

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