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After debit-card battle, beware of more bank fees

Alan Diaz / AP

A customer uses a Bank of America ATM in Hialeah, Fla., this month. Bank of America Corp. is scrapping its plans to charge a $5 monthly debit card fee after a roar of customer outrage.

The big backlash against debit card fees appears to have paid off, but consumers may not want to pop the Champagne corks quite yet.

Bank of America said Tuesday it would drop its widely criticized plan to add a $5 monthly debit card fee after many of its rivals dropped similar plans,  many of which were in the testing phase.

"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," David Darnell, co-chief operating officer for B of A, said in a statement.

But experts say the industry's retreat means that banks will look for other, more subtle ways to make up for the money they’ve lost because of recent regulatory changes.

“Yeah, this is a victory for consumers, but heads up: We’re going to be seeing some type of other fees,” said Bill Hardekopf, CEO of the credit card information website lowcards.com.

Consumers may already be seeing some new fees sneak up on them if they’re not watching their accounts closely, especially concerning minimum balances.

“Now more so than ever (you need to) read those letters you get from your banks. …  Those thick booklets with 20 pages? Read through those,” said Alex Matjanec, co-founder of MyBankTracker.com, which provides consumers with information about banks.

The backpeddling came after many consumers — already pinched by the weak economy — grew furious about the idea of being charged to use their own money to get groceries or buy gas. Many threatened to move to credit unions or community banks that wouldn’t charge such fees.

A movement even sprouted up for people to move accounts en masse this Saturday, dubbed "Bank Transfer Day."

Hardekopf said the proposed debit card fee seemed especially jarring because consumers felt like they were being forced to pay a fee to spend their own money. He said consumers tend to be more willing to accept credit card fees because they understand they are essentially being given a loan in that case.

“This was completely different. You were getting charged a fee for accessing your money,” Hardekopf said.

Still, credit card companies don’t have nearly as much leeway as they used to, either. In recent years, regulators have moved to limit some ways in which credit card companies can charge customers extra fees or raise rates.

That, combined with recent federal rules limiting the fees big banks are paid when you use your debit card, have prompted banks to look for other ways to make money.

Norma Garcia, manager of the financial services program with Consumers Union, noted that it’s rare for banks to back down on plans because consumers complain. Still, she also expects that banks will try other, less wide-ranging, measures.

“This is a victory today, but it doesn’t mean that they need to let down their guard,” Garcia said.

Garcia said consumers should pay especially close attention to whether banks are changing rules about minimum balances, and tacking on fees for people who fall below a certain level each month.

“I would be really nervous about that because if you go below the minimum balance, that could actually end up costing you more in the long run than the $5 debit card fee,” Garcia said.

Matjanec said there are plenty of ways that banks can make changes that could lead to you paying far more than a $5 monthly debit fee.

He said consumers should watch for changes in account types, which can inadvertently put you in a type of account that leaves you more vulnerable to heftier fees.

In general, he noted, a lot of people will open an account early in life and then not really pay attention to whether it’s still the right type of account for them.

 “If you were willing to change your bank because of your debit card fee, then you should look at, ‘Is this bank good for you?’” Matjanec said.

Related: Bank of America drops planned debit-card fee

Bank of America Tuesday abandoned its controversial plans to charge customers $5 a month for using their debit card to make purchases. NBC's Tom Costello reports.