New monthly debit card fees emerging across the country at some of the nation’s largest banks are lightening many college students’ wallets.
The fees surfaced to supplement a dip in bank profits after government regulations cracked down on charges on merchant debit card transactions.
“Things in the world of banking have changed, and these national changes in the banks are the reason for the smaller changes that affect the customers,” store manager of the Richmond Road Wells Fargo Matt Turner said.
Wells Fargo imposed a $3 monthly debit card fee in select states to test customer responses. The bank will then decide whether to continue the fee for the 2012 fiscal year. Bank of America, SunTrust and Chase are also charging their customers monthly fees for the debit cards at $5, $5 and $3, respectively.
Banks previously charged merchants up to 44 cents per transaction in order to pay card companies like Visa or MasterCard for their services. Now, the government has capped the amount that banks can charge merchants at 24 cents per swipe.
Compliance with these regulations has led to revenue loss for the banks, which they attempted to recover through rewards program decreases and new customer fees.
“There are other major changes happening within banks,” Turner said. “So now, for the first time in 20 years, you need to have a relationship with your bank. You can find deals that keep your service free, you just have to be proactive and seek them out.”
Assistant Manager Grisell Delgado at the Richmond Road Bank of America explained the reasoning behind the fees.
“The charges for using your debit card will go towards overdraft protection and fraud protection,” Delgado said.
For those account holders who have never have overdrafted their debit cards, though, the potential protective benefits of the monthly fees become irrelevant.
When asked if the new fees have anything to do with making up revenue that was lost from the government regulations, Delgado declined to comment.
“This is not unique to Bank of America. All banks will eventually be doing this,” she said.
Mass disapproval of the banks shifting their revenue burden from merchants to customers has erupted among students and their families. While the banks’ most affluent customers will be exempt from the fees, many college students juggling low-paying jobs and loans will bear the brunt of the change.
“It’s not fair. I don’t think they should take advantage of their customers just because they are losing money,” Sukyoung Kim ’13, an exchange student who banks with SunTrust, said. “I’m angry — frustrated I guess. I don’t even get good service from them, and now they from them, and now they’re charging me for using my own money?”
Some students hinted they might switch to CitiBank or Capital One, neither of has announced plans to charge debit card fees at this time.
Although BB&T currently does not have plans to charge customers for debit card use, the president of the bank has made statements in the press alluding to a future fee.