Wells Fargo Charging Debit Fees - Spokane, North Idaho News & Weather KHQ.com

Wells Fargo Charging Debit Fees

SPOKANE, Wash. - If you're a Wells Fargo customer, you may notice a new charge on your monthly statement: Debit Card Fee. The bank began charging it's customers $3 a month to use their debit card. Recently Bank Of America also began charging a fee to use your debit card and access your money. We are wondering: "Are these fees prompting you to close your account? Switch to a Credit Union perhaps?" Sound off! Join the conversation and let us know on our Facebook page by CLICKING HERE.

Below is a recent article from credit.com regarding the new fees.

CREDIT.COM - If you have a checking account with Wells Fargo, look out: The megabank is about to start charging some customers $3 a month to access their own money. According to a fee schedule the bank recently released, customers in Georgia, Oregon, Washington, Nevada and New Mexico will have to pay $3 every month to make purchases using their debit cards.

The new fee takes effect starting Oct. 14, and the company describes it as a test. If it creates widespread outrage, that could mean the bank will drop the fee entirely. But if customers accept the idea of paying $3 a month for the privilege of using their own money, the practice could become permanent nationwide.

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"It wouldn't surprise me if a lot of consumers push back," says Gerri Detweiler, Credit.com's consumer credit expert. "They could either decide to change banks or change the way they pay. Maybe I should use that credit card that's been collecting dust instead."

The move by Wells Fargo comes in the wake of a decision by the Federal Reserve to limit debit interchange fees. These are fees that credit card issuers charge retailers every time a customer swipes her debit card to make a purchase at a store.

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For years those fees crept up, reaching an average of 44 cents per swipe by 2010, the Fed found. The government's original proposal would have slashed the fee to 12 cents per swipe. After a months-long lobbying onslaught that cost the credit card industry millions of dollars, the Fed compromised, capping the base fee at 21 cents per swipe. The new rules take effect Oct. 1.

In the midst of the heavy lobbying campaign to delay, reduce or overturn implementation of the Fed's new interchange fee cap, Wells Fargo threatened to suspend debit rewards programs and increase fees on debit cards to compensate for revenue lost to the cap. Chase responded with an attempt to charge non-customers $5 every time they used a Chase ATM in Illinois and $4 in Texas. The test apparently failed, since the bank reduced fees in both states back down to their normal $3 in May.

The decision to increase fees now could be risky for Wells Fargo. According to a recent poll by the Associated Press, 61% of debit card users said they would find a different way to pay if they were charged $3 a month to use their debit cards.

[Related article: Watch Out for the New Fees]

If consumers do switch, it could spell even more trouble for Wells, since debit cards are the only payment method that actually makes the bank money. Two alternatives, cash or checks, cost banks more money in increased personnel fees to handle all associated paperwork.

Paying with credit cards may cost consumers increased interest charges. But for those who pay off their balances at the end of the month, they get the convenience of paying with plastic, often combined with rewards programs that cost Wells Fargo money to offer.

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