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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Large Banks Adding New Fees for Debit Card Usage

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Large Banks Adding New Fees for Debit Card Usage

Instead of rewarding customers for using debit cards, several large banks are starting to charge their customers. On Tuesday it was mentioned in the discussion forum about Wells Fargo's new fee of $3 per month when customers use their debit cards for purchases. This fee starts on October 14 in certain states. Other banks which are adding similar fees are mentioned in this Wall Street Journal article. These include Regions and SunTrust.

Banks are blaming the new debit card interchange fee regulation that takes effect in October. This will cap the fees to 21 cents with an extra 0.05% of transaction price to cover fraud prevention costs. The Fed raised the caps in their final rules that were released in June to ensure all costs were taken into account. Apparently, that wasn't good enough for the large banks.

The caps only apply to large banks with at least $10 billion in assets. There are concerns that this regulation will also impact small banks, but there is still a lot of uncertainty about this. In June PerkStreet Financial's COO said he thought it wouldn't have an effect on their debit card rewards program. I haven't seen the same announcement from banks offering high-yield reward checking accounts. Most all banks offering reward checking accounts have assets under $10 billion.

In an optimistic take on this, perhaps this will encourage people to move their money from the mega banks into community banks and credit unions.

For most of the readers of this blog, the only reason to use a debit card is to qualify for high interest in reward checking accounts or cash back rewards in programs like that offered by PerkStreet Financial. Without those rewards, most readers probably prefer a credit card which provides more protection, cash back rewards and other perks.

Please refer to my reward checking account overview post to learn more about high-interest reward checking accounts.


Related Pages: SunTrust Bank, Regions Bank

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Comments
15 Comments.


Comment #2 by Anonymous posted on
Anonymous
The merchants got lower fees from the banks because of Durbin.

and now the banks get their losses back by ****ing the consumer,

and the merchants aren't lowering their prices to the consumer,

So, the Dodd Frank Durbin Amendment was just one big waste of time and money, and the consumer still gets ****ed.

 

14
Comment #3 by Anonymous posted on
Anonymous
What does market down 450 mean? Does this poster side with the big, greedy banks? Or is the post unrelated to the depositaccounts.com story?

3
Comment #4 by Maecl posted on
Maecl
To #3,

Don't blame the big greedy banks.  They are looking for new ways to make money because of the new banking rules that Congress passed.  They are the ones who pass laws that allow a company like GE to legally not pay a penny in tax.  They exist to make laws that make our lives more difficult not better.

5
Comment #5 by Anonymous posted on
Anonymous
to 3 watch tv or read the paper?

2
Comment #6 by Anonymous posted on
Anonymous
Bullsh*t posts are a waste of everyone's time. 

Mr or Miss "Market Down 450"'s post added NO value to this discussion and invited a chain of retorts. 

That's the only thing I don't like about this website:  unnecessary bullsh*t thrown in, when we're all really here for INFORMATION and NOT for opinions or political lectures.  Those detract from the goal of this website.

11
Comment #7 by Wil posted on
Wil
First banks encourage debit card usage by inventing RCAs, now they reverse course and discourage debit card usage by charging fees for the privilege. One wishes they would make up their minds! But if you ask what has changed in the interim, it is clear that it is Dodd-Frank, and like much of what Washington does with the best of intentions (to give the 'benefit of the doubt'), there are always unforeseen consequences. The result it a law that fails to deliver the imagined benefits while at the same time causing undesirable ends. Dodd-Frank was a mistake, and needs to be repealed! Is it too much to ask of our elected officials that they admit their mistakes?

4
Comment #8 by Maecl posted on
Maecl
Both political parties have contributed to the problems we have today.  What happens at both state and federal levels affect our lives financially.  This is an open forum, and like it or not Dodd-Frank will cost us.

3
Comment #9 by retort (anonymous) posted on
retort
6 aka caca del toro and your comment should be retort free?? ever here of the first amendemen?  as sb would say what is your point i am no math major but i see uno retort plus there are six thumbs up for 1 some one must appreciate the comment   

1
Comment #10 by Anonymous posted on
Anonymous
Please dont blame Banking guy for the market 450 point drop. He just writes banking articles.

2
Comment #11 by RJM posted on
RJM
If people are willing to pay it, more power to them I guess.

Its hard for me to fathom.

That said, i suspect that over the next 6 months to few years, places will start offering cash discounts and such to change the "charge it" behavior that reward cards has encouraged.

1
Comment #12 by Anonymous posted on
Anonymous
To anonymous #6 who was whining about the anti-Obama post: The banks are blaming legislation that was pushed by democrats and Obama. Sorry, but politics did play a part in this decision. Regardless of whether the banks really have to do this, the new legislation gave them an excuse to add penalties. Really though, I blame Scott Brown and Olympia Snowe who voted with the dems.

3
Comment #13 by Jo (anonymous) posted on
Jo
I am not going to focus on who to blame. When it comes to the big banks, no matter what, it seems, they will find all manner of excuses or reasons to hit their customers with fees. It seems that if they don't meet their bottom line each quarter, they go after customers to profit off of in order to make up for their losses.

The only big bank I am still with is US Bank. They aren't too bad, so for now I will stick with them. But the others can all go suck lemons. Nothing except making those quarterly profits off the account holders will make them happy. They're nothing more than leeches.

1
Comment #14 by sucky leeches (anonymous) posted on
sucky leeches
hay gaelic wench lighten up

1
Comment #15 by Anonymous posted on
Anonymous
If you are tired of paying the Big Banks fees, then close your account and go to a Credit Union.  They have the same products and services and do it with fewer fees.  They are usually smaller and more friendly and treat you like a member-owner not just a number. 

1
Comment #16 by MARKET DOWN 450 (anonymous) posted on
MARKET DOWN 450
HAY 3 ETIB EM

1