Bucks Blog: Banks Test Monthly Fees for Debit Cards

Bloomberg

Using a debit card for purchases has become second nature to many of us. But now some banks are taking steps that make the cards less attractive, by charging monthly fees for their use with some checking accounts.

The moves follow the heated debate over limiting the “swipe” fees that banks charge retailers for processing debt transactions. Banks say they have to make up that lost interchange-fee income from somewhere — for example, by eliminating debit card rewards programs, and by adding fees on customers for shopping with debit cards.

Wells Fargo, for instance, is notifying customers this month that beginning in October, the bank will test a debit card “activity fee” of $3 a month when a customer makes a purchase or payment with a debit card linked to a personal or business checking account. (ATM transactions won’t trigger the fee.)

The test will affect accounts opened in five states: Oregon, New Mexico, Nevada, Georgia and Washington. The bank said the accounts will continue to carry perks including “card personalization,” which lets you put a photo of, say, your dog on your card. (Gee, thanks.)

“This is one of those ways we are looking at recouping lost revenue,” said a Wells Fargo spokeswoman, Lisa Westermann, in an e-mail.

SunTrust Bank recently implemented a $5-a-month fee for debit card purchases for holders of its basic Everyday Checking account and will add the fee to its student checking account next spring. In any given month, if the customer uses the debit card to make a purchase — either using a signature or a PIN — the bank will charge a single $5 fee. The fee doesn’t apply to use of the card for ATM transactions.

“As I’m sure you’re aware, a debit card usage fee is a growing trend due to changes in the environment in which our industry operates,” Hugh Suhr, a SunTrust spokesman, said in an e-mail.

Regions Bank, meanwhile, now charges a $4 monthly fee for debit card purchases for holders of its basic LifeGreen Checking account and its student checking account, according to the bank’s Web site. (The fee doesn’t apply to ATM transactions and is waived if you don’t make any purchases with the card.)

JPMorgan Chase is testing a $3 monthly fee for a debit card with a basic checking account in northern Wisconsin. (Customers there have three other accounts to choose from that provide a debit card with no fee, according to a bank spokesman.)

Would you cut back on use of your debit card, if your bank charges you a fee for shopping with it?

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