<em>Patt Morrison</em> is known for its innovative discussions of local politics and culture, as well as its presentation of the effects of national and world news on Southern California.
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Free debit cards swiped away: banks starting to charge monthly fees for debit cards

A banking customer uses an ATM at a Wells Fargo Bank branch on July 19, 2011 in Oakland, California.
A banking customer uses an ATM at a Wells Fargo Bank branch on July 19, 2011 in Oakland, California.
Justin Sullivan/Getty Images

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In an era of relentless bank fees, it seemed the one sure bet to remain free for use were debit cards. The ATM cards that could be used like a credit card, they have become among the most used banking tools in the industry—easy, reliable and up until now, free.

Like all good things it seems like the principle of free debit cards has come to an end: starting in October in five states, Wells Fargo will charge customers $3 per month if they use their debit card to make purchases.

Customers can avoid the fee if they don’t use their card or by signing up for certain checking accounts; JP Morgan Chase has been testing out a $3 monthly charge for its debit card customers in Wisconsin, and other smaller banks are also starting to implement similar fees.

This can all be traced back to the Dodd-Frank Wall Street Reform & Consumer Protection Act, passed last year, that among other things capped the amount that banks can charge merchants in “swipe fees” for using debit cards. Those fees are capped at about 21 cents per transaction, down from an average of 44 cents per transaction.

It’s natural for banks to go looking elsewhere to make up for that lost revenue and they have apparently turned to the pockets of their clients. Free debit cards aren’t the only unpleasant change for consumers, debit card rewards programs are being eliminated.

If your bank eventually starts to charge you for using a debit card, will you close down the account or simply pay the $3/month to avoid the hassle?


Ed Kadletz, executive vice president and head of debit cards, Wells Fargo Bank

Ed Mierzwinski, director of the consumer program at the U.S. Public Interest Research Groups