Expect Cut Backs in Debit Card Incentives

Sep 26
08:09

2011

Steve Robinson

Steve Robinson

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Travelers experienced in the ways of how to find cheap airplane tickets, discount hotel rooms, and cheap vacation packages know that using certain credit and debit cards further reduces the cost of travel.

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Now banks are moving to reduce benefits and add fees for using their debit cards as a result of new government regulations which limit the fees banks can charge merchants to process debit card transactions.

The following are just a few examples of banks adding fees and/or taking away benefits for debit card use:

·       Wells Fargo will shortly conduct a trial whereby it will charge a $3 monthly fee for debit card use for residents in Georgia,Expect Cut Backs in Debit Card Incentives Articles Oregon, New Mexico, Nevada, and Washington.

·       Sun Trust is currently issuing debit cards that come with a $5 monthly fee. 

·       Regions Bank has announced it will add fees to select cards starting as of October.

·       Chase is currently testing debit card fees in select markets.

·       Chase recently did away with its reward program for debit cards. Many experts expect other banks will shortly take the same action.

If you currently earn rewards using a debit card, you should expect those rewards to soon be eliminated and likely fees to be added.  If you want to continue earning rewards, you will need to shift most purchases to a credit card, where banks are still allowed to charge merchants high fees.  Those fees provide banks with revenue to offer rewards to their credit card holders.

In the short term, if you want to continue to use a debit card, and your bank starts charging debit card fees, look into moving your checking account to a different bank that is not charging those fees.  Currently most larger banks are not adding debit fees, but long term are expected to do so.