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Debit card fee announced for Wells Fargo customers

August 23, 2011

| Money Rates Columnist

As expected, Wells Fargo will test out new monthly fees on debit cards tied to a checking account, announcing that its customers in five states will have to pay to purchase with that particular piece of plastic starting in October.

Wells Fargo will charge its customers $3 a month for using their debit cards for purchases or payments but not for ATM withdrawals. Not every checking account offered by Wells Fargo will carry the debit fee.

Banks use these tests to measure how many checking account customers they lose as a result of the new fees. Wells Fargo is testing its fee in Nevada, Oregon, New Mexico, Georgia and Washington. Chase has been testing a $3 monthly fee in Wisconsin.

Wells Fargo also announced it is ending its debit card rewards program.

The new fees are a result of the Dodd-Frank financial reform law, which ordered the Federal Reserve to cap the swipe fees merchants pay banks when you buy something with your debit card. The Fed capped those fees in June, cutting them in half, and banks have been casting about for ways to make up for the billions in lost revenues.

Although it looks now as if customers will have to pay the banks instead of the merchants, retailers said during the Dodd-Frank debate on swipe fees that capping those costs would allow them to pass their savings on to consumers. We'll see if that happens.

The new debit card fees come on the heels of new fees many banks are charging for checking accounts. Banks used to cover the costs of free checking through overdraft charges, credit card fees and other practices that have since been outlawed by Dodd-Frank.

Some banks are considering putting a cap on how much you can purchase with a debit card. This might get you to use your credit card instead, which would make banks happy because the Fed didn't cap the transaction fees banks charge merchants for credit purchases.

So far, savings accounts and money market accounts have not been affected, although the interest banks are paying for even the best savings accounts remains low.

Your responses to ‘Debit card fee announced for Wells Fargo customers’

Showing 9 comments | Add your comment

20 September 2011 at 6:57 pm

Well, just did some checking on Wells Fargo's website and found that if I changed from the $15 a month premium account (which has features I don't use) to the $10 Way to Save account, I can get it for free because I have it tied to a savings account and have my paycheck direct deposited. Called them to see what they'd say if I simply asked for an account without fees. I was told that there was nothing I could do short of moving $7,000 into the existing checking account. I asked about the Way to Save and was told I'd have to keep a $2,000 balance, and when I asked about the rules on the web site I was told to go into my branch to change the account. They REALLY don't want people knowing that they can still get free checking without a minimum balance requirement. Changing is a hassle but still easier than changing banks.


20 September 2011 at 10:20 am

There will not be savings for merchants to pass on, because patrons will just switch from debit cards which cost them to credit cards which don't. Credit card fees to retailers are higher than debit card fees. Goodbye non-existent savings. If anyone knows how I can teak my Wells account to avoid the $15 a month charges I'd welcome the advice. I already maintain a checking plus savings with automatic transfers and have my paycheck automatically deposited. That used to be all I needed to do; now they want to charge me even after I jumped through all the hoops. Have $ at my brokerage but their checking accounts blow boogers.


5 September 2011 at 1:49 pm

Just another bank scam. Multiply the $3 x the number of customers in *only* these six "test" states, and it is MILLIONS! Call Wells Fargo and *insist* the Customer Rep file a "Customer Listen Report" and then send them an email as well from the website. Using a debit card as a credit card won't be enough -- next they will charge $3 per month if you use it AS a credit card because not enough customers are using the debit card *for purchases*!

Keeram Boune

31 August 2011 at 2:54 am

How about this situation? Debit card incentives have been a casualty in the war against excessive financial institution charges. Huge banks like Wells Fargo have been ending debit card incentives. The rewards had continued for those already enrolled in Wells Fargo's rewards program. However, all debit card incentives will be kaput as of October of this year. Article like Wells Fargo cancels debit card rewards in which I read discussing related situation. Financial institutions are wise in dealing with the economy by using marketing strategy for profit survival and for giving good customer service.


28 August 2011 at 8:35 pm

Well you do realize it costs banks money to run machines and computer systems. Plus the thousands they spend on protecting their members. In addition, as the article stated, banks get the full fee for credit card purchases. I never use the debit option on my bank card. The credit card company is better suited for protecting you then the bank, more identity happens through debit purchases than anything else. Run your card as credit and you can avoid the fees and save yourself the heartache of having your identity stolen.

C J Moss

26 August 2011 at 10:08 am

These banks are carzy, We are being nickeled & dimed (dollared) for everything under the sun. We were set up to be in this circumstance by employers requiring direct deposit to pay their employees (Virtual Money). Now the banks have everyboby's money tied up in the banking system (Cashless System/Debt Cards) . WE ARE A BUNCH OF FOOLS TO LET THIS HAPPEN TO US AS A SOCIETY.

Joan H

26 August 2011 at 9:36 am

Do you know if this is a flat fee even for customers who don't use their ATM for purchases?


25 August 2011 at 10:52 am

Sounds like the banks can't think of a smarter way to make money. They lost my business.

Linda in Woodbridge

23 August 2011 at 7:52 pm

Seems like to me this would be a step backward! People will have to just use CHECKS or CASH to make purchases.

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