Expecting JPMorgan Chase to reward you for using your debit card? Think again. Chase is the latest bank to trim debit card benefits, blaming it on new federal rules that would cap so-called “interchange” fees, the fees banks charge retailers for processing debit card transactions.
Chase is mailing letters to its customers informing them that as of July 19, the rewards will be history. Customers will still be able to redeem rewards but will not earn new ones. PNC Bank and US Bank have also rolled back some of their debit card benefits.
Chase debit card users with co-branded cards have been accumulating airline miles on Continental and United. They've also been enjoining a waiver of the $25 fee for the first checked bag. That perk goes away April , according to Continental.
The only consolation is that Chase will stop charging the $25 annual fee consumers have been paying for the cards and the $65 annual fee charged to business travelers.
The Federal Reserve's proposed rule would cap the interchange fee at 12 cents, a 75 percent drop from its current level. The proposal followed years of complaints by merchants and consumer advocates who said the fees amounted to a hidden tax on consumers.
What options do Chase customers have? Not many. Changing debit cards isn't as easy as changing credit cards, since the debit card is tried to the consumer's checking account.
You'd have to open a new checking account at a different bank, one that offers perks on its debit cards – and then you'd have to hope that bank didn't follow Chase and the others that have already sliced debit card benefits.
While Chase is the largest bank to trim debit card benefits, it's most likely not the last. Bank of America, Wells Fargo and other large banks have not announced any plans but may do so when the Fed releases its final proposal next month.