Many area banks next month will begin charging their customers to use debit cards.
The banks are responding to federal legislation that capped the amount of money banks could charge per debit transaction. The new cap for each debit transaction is 21 cents. The rule shifted the cost of providing debit card services from merchants to customers. Banks are trying to replace lost revenue by charging customers a small monthly fee for debit card transactions.
David Oliver, senior vice president of communications and marketing for the Georgia Bankers Association, said it will be up to individual banks to determine the way in which they will charge customers.
Wells Fargo customers will notice the new “debit card activity fee” on their monthly statements in November.
The fee will be effective Oct. 14, and if customers use their debit cards for purchases that month they will be charged a fee of $3.
SunTrust will begin a similar program where customers pay a fee of $5 for unlimited debit card transactions.
Hugh Suhr a spokesman for SunTrust said in an email “If a client chooses not to use the card for purchases or recurring charges during a particular month, there is no monthly usage fee.”
The rule applies to banks worth at least $10 billion. Smaller banks and credit unions are not yet affected by the legislation.
Joe Foster, CEO of Hallco Community Credit Union, said a lot of things are changing in the banking industry as a result of the federal cap placed on big banks.
He said his bank hasn’t been affected yet and he has “no plans in the near future to increase any fees.”
Oliver said he thinks it is a good value for the convenience of the service.
“Just think of all the things you get with a debit card,” Oliver said.
Debit cards allow a customer to have instant access to their money anytime of day. They also have several other benefits such as fraud protection, security, the opportunity to view past transactions and automatic ability to pay bills. In many cases checking accounts earn interest.
“Debit cards are a convenience service with many benefits,” said Jamie Dexter, Wells Fargo communications consultant.
Dexter said the debit card fees are impacting the entire industry. But she said she feels some customers won’t mind paying a dime a day for the convenience.
Some customers are concerned about the new fee but they could end up spending the same amount of money each month driving to and from ATMs to get cash.
Dexter said a husband and wife with two debit cards would only pay the fee once, provided they share a joint checking account. Customers who use their debit cards to get cash from their bank’s ATM will not be charged.
Oliver said many banks offer ways to avoid extra fees. He said that 71 percent of banking customers do not pay anything for monthly account fees, a statistic that he said “goes to show customers are pretty good at saving.”