The fees are coming! Since February, Chase Bank has been testing out a monthly fee for anyone who uses their ATM debit card for purchases in areas of Northern Wisconsin. Regions Bank and Suntrust have added fees as well. Per this CNN Money article, Wells Fargo Bank just announced that it will start charging a $3 monthly fee for debit card usage next month in Georgia, New Mexico, Nevada and Oregon. (I guess they’re afraid of messing around in California just yet.) According to this WSJ article, Wells Fargo is only announcing this fee with one of those small inserts in your monthly statements, so heads up.
I know there has been drama over debit card interchange fees, but that was just a result of two big lobbying groups – small businesses vs. big banks. It was really not about consumer rights. The result was a new law that caps debit card interchange fees at 21 cents + 0.05% of the sale amount for banks with $10 billion or more in assets. Smaller banks with debit rewards like PerkStreet (review) say that this will not affect them.
I never use my debit card for purchases, so I would not be affected by any of this. Credit cards offer more consumer protection against fraud and things like extended warranties and free insurance, on top of the ability to delay payment for 15-30 days of float. More importantly, credit card rewards are better which means more money in my pocket. However, many people do like the simplicity of debit cards for purchases. If they don’t want to pay the fees, I hope they will vote with their money and move it immediately to bank that doesn’t charge such fees. Don’t expect banks to care about your angry internet comments; affect their bottom line and they’ll listen.
By Jonathan Ping | Banking | 8/18/11, 4:30am