Watch Out for New Bank Fees
Welcome to another day in my life. Today is Friday and we have almost made it through another work week. I hope you are having a safe and great week so far. It has been a very busy and long week for Dab the AIDS Bear and me.
Now we all know how rough things our in the United States with millions of people being unemployed, everyone shopping for bargains and many struggling just to keep food on the table. So I was surprised to learn about a bank starting to charge people to use their own money.
What? You have not heard about this yet? Well read on so you will know if you need to change your bank.
A new report emerged Tuesday that Wells Fargo (WFC) will begin charging some customers $3 every month to use their debit card -- further indication that banks are putting on the squeeze as new swipe-card regulations are set to take effect.
Wells Fargo already sent letters to customers in Georgia, New Mexico, Nevada, Oregon and Washington that the fees will begin Oct. 14, according to MyBankTracker.com. That's just two weeks after Federal Reserve-mandated rules slash the amount banks can charge retailers for every debit card purchase. Regulators reduced the maximum bank take on each transaction from 44 cents to 24 cents.
A chain reaction was already in effect before Wells Fargo acted. In March, JPMorgan Chase (JPM) began assessing a $3 service fee for debit card use and $15 for checking accounts in certain regions, according to reports. Chase has also pondered the idea of capping the amount per debit-card purchase at $50 to $100, along with other major institutions such as Citigroup and Bank of America, the New York Post reported.
Not only would customers not be able to pay for items as modest as a children's bicycle with the debit card, they would likely be forced to make more individual transactions that would generate more charges.
In another strategy to offset anticipated losses from the upcoming Fed reductions, Bank of America (BAC) already raised its ATM fee to $3.
The bad news may keep coming for Wells Fargo customers. At a recent conference, Wells Fargo Chairman and CEO John Stumpf outlined other possible revenue generators, including raising minimum account balances and slapping on a fee for even the right to have a debit card, MyBankTracker wrote.
Wells Fargo estimated it would save more than $200 million in losses with the $3 debit card fee. But it might also anger a lot of account holders in the process. If the fee were to go in effect nationwide, it would hit 40 million Wells Fargo customers, the article said.
While the banks figure out to the penny how to offset the inhibited profit flow, one wonders if anyone in the industry is putting a price on customer resentment?
So if you do not have an account with a credit union like I do, it might be time to start shopping around for a credit union in your area. So far, I have not heard of any credit unions considering charging to use your own money.
Hope you have a safe and great weekend.
Until we meet again; here's wishing you health, hope, happiness and just enough.
big bear hug,