Interchange Fees Forum

Not happy about bank fees? Better get used to it.

Some of the nation’s largest banks have launched or are considering charging fees when consumers make purchases with their debit cards — that popular plastic link to checking accounts.

Wells Fargo, Atlanta’s second-largest bank in terms of deposits, announced this week it will test a $3 monthly fee for debit card use for customers this fall in Georgia and four other states.

Atlanta-based SunTrust Banks, the city’s largest bank, launched new account offerings in June, including Everyday Checking that charges customers $5 per month for debit card use.

Regions Bank recently announced a debit fee of $4 a month for certain accounts in October.

More banks likely will follow suit because regulatory changes have cut into bank fee revenue, said Ed Sibbald, a former banker and director of the Center for Financial Excellence at Georgia Southern University. Many community banks, online banks and credit unions are among the fee-less alternatives, but that could change.

“The community banks are just keeping their powder dry to see what the big banks are going to do,” Sibbald said. “Quite frankly, the small banks are going to have to do the same thing.”

Rob Kirkland of Jonesboro said squeezing more fees from customers “means more to people these days.” Kirkland said his credit union doesn’t charge a monthly debit fee.

“I’m thankful I don’t have to worry about it,” he said. “For now, I’m safe as far as that fee will go. Swipe away.”

In recent months, many of the nation’s biggest banks, including SunTrust, Wells Fargo and Bank of America, reworked their requirements for checking accounts. Many featured new fees or put up new hurdles for customers to receive waived fees. Some banks also dropped rewards programs for debit cards.

Experts say charging customers for using a card, or establishing stricter requirements to keep usage free, was just a matter of time.

Recent federal regulation capped overdraft fees and certain levies on credit cards. The Federal Reserve this summer capped what banks could charge merchants when consumers swipe a debt card.

Merchants previously paid on average 44 cents per debit transaction, which was built into cost of goods. Under the new rules, interchange or swipe fees for banks with more than $10 billion in assets are capped around 25 cents.

For SunTrust, that represents $185 million in annual revenue on debit card transaction fees alone.

Debit services come at a high cost and that revenue has to be replaced somehow, Sibbald said.

In most cases there are ways to avoid the new bank fees, but it’ll take a little work. In some cases, a consumer might need to keep a higher bank balance or do more business with the bank to avoid fees.

The monthly debit card fee for purchases would apply whether a consumer chooses “credit” or “debit” at the cash register.

Many existing Wells Fargo accounts are exempt, and customers can avoid the fee with direct deposit or maintaining certain minimum balances, spokesman Jay Lawrence said. Wells Fargo’s debit fee also can be waived by customers who use a Wells Fargo credit card and pay off the balance each month.

“Customers can decide if the convenience and benefits of using a debit card for purchases are worth a dime a day,” Lawrence said.

At SunTrust, the monthly debit fee currently applies to basic Everyday Checking accounts, though it will be part of a revamped Student Checking account starting in March.

Customers will be moved into new checking accounts by November, said Hugh Suhr, SunTrust spokesman. The bank is notifying customers about the changes so they can pick a suitable account, he said.

“Generally speaking, clients can avoid fees based on the depth of their relationship with us,” Suhr said.

The fees at Wells Fargo, Regions and SunTrust apply only to purchases, not ATM withdrawals.

Bank of America, the No. 3 bank in Atlanta, said the company “[is] not testing a debit fee at this time, but we are evaluating pricing across all our payments products,” according to a spokeswoman.