Banks Add New $3 Fee For Accessing Your Own Money With Debit Card

highway80west

Former Staff
Mar 2007
17,140
256
San Diego, CA
#1
Banks add new $3 fee for accessing your own money with debit card



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[font=courier new,courier,monospace]In one of the first tangible fallouts from new federal restrictions on debit card "swipe fees," Wells Fargo bank and other card issuers are launching test programs to charge some debit card users $3 a month if they use their cards.[/font]

[font=courier new,courier,monospace]"We are joining other debit card insurers in testing a monthly debit activity fee ($3) on a subset of checking products for customers that prefer to use their debit card," Lisa Westermann, Wells Fargo's assistant vice president of public relations for card services and consumer lending, said in an e-mailed statement.[/font]



[font=courier new,courier,monospace]"Customers will not be charged a fee if they do not use their debit or ATM card to make purchases or payments," she added.[/font]



[font=courier new,courier,monospace]Swipe fee fight fallout[/font]



[font=courier new,courier,monospace]Starting Oct. 1, 2011, banks can charge only about [/font][font=courier new,courier,monospace]21 cents per swipe[/font][font=courier new,courier,monospace] to merchants whose customers make debit card transactions. Currently, those fees, also called interchange fees, are 1 percent to 2 percent of the purchase amount -- or 44 cents on the average debit card purchase. Frank Keating, president of the American Bankers Association trade group, said in June the debit swipe fee cap would cause a 45 percent drop in revenues and predicted lenders would charge "higher fees for basic banking services."[/font]



[font=courier new,courier,monospace]The new $3 fee appears to be a move in that direction. Starting Oct. 14, 2011 -- two weeks after the new swipe fee caps take effect -- Wells Fargo debit card customers in Oregon, New Mexico, Georgia, Washington and Nevada will be charged a "debit card activity fee" if they use their cards to make purchases. The fee will appear on monthly statements beginning Nov. 14, 2011, according to Wells Fargo [/font][font=courier new,courier,monospace]fee disclosure documents[/font][font=courier new,courier,monospace]. The fee applies if customers make at least one purchase during the billing cycle on a card linked to a checking account.[/font]



[font=courier new,courier,monospace]A spokesman for [/font][font=courier new,courier,monospace]Chase[/font][font=courier new,courier,monospace] Card Services confirmed that the bank began testing $3 a month fees on basic checking accounts "in a small market back in February."[/font]



[font=courier new,courier,monospace]"The test continues, but has not been expanded," Thomas Kelly said in an e-mailed statement.[/font]



[font=courier new,courier,monospace]Federal limits on fees[/font]



[font=courier new,courier,monospace]The changes are a result of Federal Reserve debit card interchange fee limits the agency was told to write under the Durbin amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act signed into law in 2010. Even before the Fed finalized the debit rules, [/font][font=courier new,courier,monospace]banks were already eliminating debit card rewards programs, which are financed by merchant interchange fees[/font][font=courier new,courier,monospace].[/font]



[font=courier new,courier,monospace]Debit cards are the No. 1 [/font][font=courier new,courier,monospace]noncash payment method[/font][font=courier new,courier,monospace] in the United States. The cards are a convenient way for customers to access funds held in checking and savings accounts.[/font]



[font=courier new,courier,monospace]Poll: Many customers would stop using debit card[/font]



[font=courier new,courier,monospace]Some consumers may rethink using their cards because of the monthly fees, which would come to $36 a year with monthly debit use.[/font]



[font=courier new,courier,monospace]An [/font][font=courier new,courier,monospace]Associated Press/GfK poll[/font][font=courier new,courier,monospace] conducted in June 2011 found that 61 percent of respondents with debit cards said they would switch to another form of payment if their bank instituted a $3-a-month usage fee. Only 38 percent said they would keep the debit card. Likelihood of dumping the debit card increased as the monthly fee rose. Asked how they would react to a $5 monthly fee, 66 percent said they would switch. The number grew to 81 percent if charged $7 a month. Most were likely to switch to cash, then checks, then credit cards.[/font]



[font=courier new,courier,monospace]Banks may not feel they have much choice: During Wells Fargo's July 19 [/font][font=courier new,courier,monospace]second quarter earnings call[/font][font=courier new,courier,monospace], Chief Financial Officer Timothy Sloan said the cap on swipe fees will cost the bank $250 million per quarter beginning in the fourth quarter of 2011. "We expect to recapture at least half of this through volume -- half of this over time through volume and product changes," he said. [/font]



[font=courier new,courier,monospace]Westermann said the $3 usage fee is waived for some checking accounts and debit card users should check with their local bank branch to see how they may be impacted.[/font]



[font=courier new,courier,monospace]She adds: "We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition, and our cost of doing business.[/font]



[font=courier new,courier,monospace]Our goal is to set a fair price that is consistent with the value of each product or service."[/font]



[font=courier new,courier,monospace]Representatives of [/font][font=courier new,courier,monospace]Bank of America, Citi, Capital One and Discover[/font][font=courier new,courier,monospace] said they do not have debit card activity fees.[/font]



[font=courier new,courier,monospace]Three most recent Emerging payment systems: Prepaid, debit, gift cards stories:[/font]
  • [font=courier new,courier,monospace]9 ways to avoid debit card usage fees[/font][font=courier new,courier,monospace][/font][font=courier new,courier,monospace] – Experts say consumers can avoid paying big banks' new monthly debit card fees by switching to a smaller bank, using credit cards or mobile payments, or pulling out that old-fashioned green paper -- cash ...[/font]
  • [font=courier new,courier,monospace]Bank of America to charge debit card customers $5 monthly use fee[/font][font=courier new,courier,monospace][/font][font=courier new,courier,monospace] – Bank of America will begin charging its debit card customers $5 a month when they use their debit cards to access money in their checking and savings accounts. BofA is the largest bank to institute debit card fees ...[/font]
  • [font=courier new,courier,monospace]5 places with the highest ATM fees[/font][font=courier new,courier,monospace][/font][font=courier new,courier,monospace] – Need cash and your bank's ATMs are nowhere to be found? If you're stuck in one of these places, be prepared to spend up to $20 for a withdrawal ...[/font]

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Just another tack to take our money.
 
Feb 2007
34,677
17
Los Angeles
#2
I love the way the Republican toadies blame Sen. Durbin for daring to pass a law forcing banks to reduce rip-off debit card fees to retailers.



They use to charge 45c, now they only charge about 23c.



Consumer groups estimate it costs the banks 1 to 4 cents to process a debit card transaction



So now the poor banks have to come after all of us to shore up their sagging profits!



Aren't we the ones who bailed them out just 3 years ago? This is how they thank us?



And since when did banks have a God-given right to make a predefined level of profit?



Remember this when the Republicans whine about "too many regulations"



Of course they would love to have the freedom to rip us off any way they choose!



Yet another example of the 1% screwing everyone else
 
Feb 2007
34,677
17
Los Angeles
#8
Bank of America is a lying pack of thieves. It's debit card use fee was enacted on Oct. 1. http://www.loansafe....debit-card-fee.



Citi Bank has imposed a "penalty" on checking accounts with less than a $6,000 balance. http://www.ibtimes.c...-debit-card.htm



JP Morgan Chase and Wells Fargo are testing similar fees on debit cards in several states. http://news.wustl.ed...ages/22769.aspx




The Durbin Amendment took effect Oct 1 but BofA won't start charging for debit card use until next year.



I hope millions of people leave these rip off banks and move to smaller banks or credit unions
 

imaginethat

Forum Staff
Oct 2010
66,943
27,007
Colorado
#9
imaginethat' timestamp='1317855696' post='359621 said:
Bank of America is a lying pack of thieves. It's debit card use fee was enacted on Oct. 1. http://www.loansafe....debit-card-fee.



Citi Bank has imposed a "penalty" on checking accounts with less than a $6,000 balance. http://www.ibtimes.c...-debit-card.htm



JP Morgan Chase and Wells Fargo are testing similar fees on debit cards in several states. http://news.wustl.ed...ages/22769.aspx




The Durbin Amendment took effect Oct 1 but BofA won't start charging for debit card use until next year.



I hope millions of people leave these rip off banks and move to smaller banks or credit unions


You're correct. Thanks for correcting my error.
 
Feb 2007
34,677
17
Los Angeles
#10
gary' timestamp='1317856124' post='359624 said:
[quote name='imaginethat' timestamp='1317855696' post='359621']

Bank of America is a lying pack of thieves. It's debit card use fee was enacted on Oct. 1. http://www.loansafe....debit-card-fee.



Citi Bank has imposed a "penalty" on checking accounts with less than a $6,000 balance. http://www.ibtimes.c...-debit-card.htm



JP Morgan Chase and Wells Fargo are testing similar fees on debit cards in several states. http://news.wustl.ed...ages/22769.aspx




The Durbin Amendment took effect Oct 1 but BofA won't start charging for debit card use until next year.



I hope millions of people leave these rip off banks and move to smaller banks or credit unions


You're correct. Thanks for correcting my error.

[/quote]





You are correct about the BofA being a lying pack of thieves. No wonder they are being sued by all 50 states



The behaviour of the Big Banks goes back to the 1% discussion on the Occupy Wall St thread.



They cannot lose.



They are above the law and can manipulate it to suit their own ends, and to hell with everyone else