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Wells Fargo's $3 fee may come as a surprise to consumers who rely heavily on their debit card for spending. The monthly debit card fees come in the wake of legislation that caps the amount that banks can get from merchants in the form of "swipe fees."
So far, Wells Fargo plans to implement the new $3 fee in five states: Oregon, New Mexico, Nevada, Georgia and Washington. The bank will be rolling out the fee starting in October.
Customers can avoid paying the fee altogether if they stop using debit cards for purchases, or if they have certain checking accounts, reports the Charlotte Observer.
Though ATM withdrawals will not result in a $3 fee, the debit card fee will be impacting a large number of consumers. A poll last month found that around 2/3 of consumers use their debit cards for purchases more often than their credit cards.
Though, with the addition of fees, these statistics may end up reversed.
The motivation behind the increase in fees is partially due to the limits on "swipe fees" that banks can collect. In 2009, banks collected around $19.7 billion in swipe fees, which will be significantly reduced as a result of the new swipe fee caps, according to the Sacramento Bee.
Banks are now scrambling to find ways to make up for the lost revenue; including ending its debit card rewards programs and charging additional fees to customers. While the Wells Fargo debit card fee is unusual, the bank may soon be joined by others as they start to feel the pinch of lost revenue. Chase is already implementing a $3 monthly debit card fee in Wisconsin, reports the Sacramento Bee.
What can consumers do to stop themselves from getting slammed with fees? Check with your bank to see if you can sign up for a checking account that doesn't require the fee. Or, find alternative ways to pay, such as with cash or credit cards.