Wells Fargo Testing Charge For Debit Cards

Banks, hoping to make up for lost fees from overdrafts and other sources, continue to find new ways to tack on fees. Wells Fargo says it is among the latest banks to charge a monthly fee for debit cards.

The bank said it will test-market a $3 monthly fee for a debit/ATM card beginning October 14. The fee will be applied to customers in several states and could be expanded nationwide later.

The fee will only be applied to consumers who use their debit cards to make purchases but do not make transactions at ATMs. It is those ATM transactions fees that provide banks with a larger source of revenue. The $3 monthly fee is designed, in part, to offset that lost revenue.

Wells Fargo is not the first bank to take this step and likely will not be the last. JPMorgan Chase, for example, has tested a monthly debit card fee in a single market in Wisconsin for most of this year.

Banks say they are reacting to more consumer-friendly regulations, as well as the Federal Reserve's decision to reduce the interchange, or “swipe” fee banks can charge merchants on each transaction.

 During the fierce debate between banks and retailers over the swipe fee, retailers promised that a reduced swipe fee would be passed along to consumers in the form of lower prices, but banks warned that consumers would end up paying the price in other ways. A debit card fee, it appears, is one of those ways.

Wells Fargo will test the new debit card fee in five states – Georgia, New Mexico, Nevada, Oregon and Washington. The bank said it will gauge consumer response before deciding whether to take the fee nationwide.