A number of major financial institutions are testing or implementing new programs that will levy monthly fees on consumers who use their debit cards.
A number of major financial institutions, including Wells Fargo and JP Morgan Chase, are testing or implementing new programs that will levy monthly fees on consumers who use their debit cards.
The banks are trying to recoup revenues lost when the Dodd-Frank Wall Street Reform and Consumer Protection Act took effect in 2010. The new regulation capped overdraft fees and charges banks could assess to credit card customers.
The new fees are assessed when consumers use their debit cards for purchases. They range from $3 to $5 per month, depending on the bank.
- Wells Fargo will begin testing its $3 monthly charge in October for customers in five states: Georgia, Nevada, New Mexico, Oregon, and Washington. Wells will also eliminate its debit card rewards program effective in October.
- Regions Bank will institute an across-the-board debit fee of $4 per month on certain accounts beginning in October.
- Earlier this summer, SunTrust started levying a whopping $5 per month fee to its Everyday Checking account holders.
Many industry experts expect more banks to launch fees on debit cards in the coming years. Pay attention to what your financial institution sends you in the mail — both separately and with your statements. If you have questions, call your bank for an explanation.
If your bank has already sent you a communication signaling that changes are on the way, you do have one very valuable option: shop around. While many of larger banks may be tempted to charge a fee for debit card usage, many smaller banks and credit unions probably won’t follow suit. You can always move your account to another institution that still offers free services. However, if you have multiple accounts with one institution or don’t have any other banks near you, this may not be the most practical or convenient option.
Also, be sure to review your bank’s new terms carefully. You may satisfy certain requirements to keep your services free or you may be able to switch to a different type of account to avoid any charges.
© 2011 McGraw-Hill Financial Communications. All rights reserved.
September 2011 — This column is provided through the Financial Planning Association, the membership organization for the financial planning community, and is brought to you by D3 Financial Counselors, a local member of FPA.