Bank of America announced plans Thursday to charge debit card users $5 a month, the latest -- but not the last -- fee the nation's biggest banks have been adding for their customers.

Bank of America, the biggest bank in both the Bay Area and the country, intends to launch the new fees in early 2012. The fee will apply only to purchases, and customers with premium accounts likely will be able to avoid the charges altogether.

It may not be alone. Wells Fargo Bank and Chase Bank are testing debit card fees of $3 a month in selected markets.

"This is the first of a wave of new fees from banks," said Ken Thomas, a Miami-based independent bank consultant and economist.

Consumers, already pummeled by a brutal economy, may find the fee tough to swallow, especially for those who don't have many banking options.

"It's ridiculous for them to do this," said Jasmin Toutounchi, 22, a Pleasanton resident who just graduated from college and said she uses her debit card because she doesn't want to add to her credit card debt. "We are struggling to survive enough already."

Banks have been raising other fees. A study by Bankrate.com this week found that just 45 percent of checking accounts are now free with no strings attached, down from 65 percent last year and 76 percent in 2009. The study also found that the total average cost for using an ATM rose to $3.81, up from $3.74 the year before. The average overdraft fee inched up to $30.83, from $30.47.

"All banks are facing increased regulations, increased fees, more challenges, more expenses and reduced revenue," said Michael Yoshikami, chief investment strategist with Walnut Creek-based YCMNet, an investment firm.

"Banks are looking to defray as many costs as possible," he said.

"I don't know if this will stick," added Hans Schroeder, analyst with the San Francisco office of Green Street Capital. "As consumers, at some point you balk at these fees. It's just a matter of how onerous it becomes."

The move comes as banks face new restrictions, starting Saturday, on the fees they charge merchants on each debit transaction. These are commonly called swipe fees.

The swipe fees will be reduced from an average of 44 cents a transaction to 21 cents, cutting banks' revenue.

"This is not a case of increasing revenue," said Greg McBride, senior financial analyst with Florida-based BankRate.com. "The banks are trying to recover revenue they are going to lose."

Regulators have crimped the ability of banks to charge overdraft fees. That has produced a response from more banks, said Blake Howells, a vice president and banking expert with Portland-based Becker Capital Management.

"Banks are cutting their totally free checking accounts," Howells said. "They are trying to offset the loss of revenue."

Bank of America is the No. 1 bank in the nation, based on the dollar amount of deposits. Measured the same way, the bank has the largest market share in the Bay Area.

Despite the bank's reach, that doesn't mean customers have to sit still.

"We are not hostage to these new and higher fees," McBride said. "We can resort to other methods of payments, or we can switch banks."

Consumers can choose community banks, regional banks, credit unions and online banks as alternatives, analysts said.

"There are a lot of banks and credit unions that will be eager to attract new customers unhappy with all of the new fees that some big banks are starting to charge," said Norma Garcia, a senior attorney with Consumers Union.

Bill Herbert, of Walnut Creek, says Bank of America has jolted him after five years as a customer of the bank.

"I use my ATM card all the time," Herbert said. "So yes, I will definitely look around to see if there's something better out there."

Some consumer advocates warn that the higher fees hurt lower-income groups more than others.

"Debit cards have become ubiquitous for us," said Preeti Vissa, community reinvestment director with the Berkeley-based Greenlining Institute. "For low-income families, $60 a year might be prohibitive. Implementation of banking regulation can't occur to the detriment of lower-income consumers."

Still, some analysts say banking regulation laws passed by Congress may have had unintended consequences.

"Banks are in business to make money," Howells said. "That's what Congress missed."

The Associated Press contributed to this report. Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

debit fees

Some of the biggest banks serving the Bay Area are launching debit fees or are studying them. Here's a brief rundown:

  • Bank of America is planning to institute a $5-a-month fee on purchases made with its debit cards. The fee is due to start early in 2012. It would apply primarily to basic accounts. People with premium accounts or those who only use the card at an ATM can avoid the fee.
  • Wells Fargo, starting
    Oct. 14, will test in select markets a $3 monthly debit activity fee. The pilot program is taking place in Georgia, Oregon, Washington state, New Mexico and Nevada. The fee applies only to transactions involving purchases and payments.
  • Chase is currently testing a $3 monthly debit card fee in Wisconsin and Georgia. At present, the bank is not testing it in California.