Wells Fargo to Charge $3/Month to use Debit Cards

[devil21]

As a merchant, they charge the merchant more for credit card transactions than debit card transactions. Essentially, by using it as a credit card, they are taking an extra .5-2% from the merchant over the debit card. Feel free to keep transferring money from your local store to the big banks if you want, but as a small business owner, I'd prefer you reserve that option for Walmart and Starbucks.

Isn't that because of the additional protections offered by using the card as a credit transaction though? It's not some arbitrary additional processing charge, correct?

My check card/debit card number was recently stolen and used as a credit transaction. The bank immediately refunded the amount charged BECAUSE it was a credit transaction. I would have been subject to different rules if it was used as debit straight out of my bank account and I may not have been eligible for the immediate refund.

 

[Icymudpuppy]

Isn't that because of the additional protections offered by using the card as a credit transaction though? It's not some arbitrary additional processing charge, correct?

My check card/debit card number was recently stolen and used as a credit transaction. The bank immediately refunded the amount charged BECAUSE it was a credit transaction. I would have been subject to different rules if it was used as debit straight out of my bank account and I may not have been eligible for the immediate refund.

No. Your debit card has all the same anti fraud protections as the credit card. The rates are lower for debit cards because a debit card transaction is more secure since it requires the PIN and a card thief will not be able to ascertain your PIN number from most* stolen wallets. Credit cards are charged at a higher rate because they are higher risk, and the chances that the transaction will be fraudulent are much higher. Likewise, when running a card, the reason merchants ask you for your phone number, zip code, 3 digit code on the back, billing address etc, is to save a few percent on each transaction. Card processing runs from about. .8% for a debit card swiped with PIN to about 5.8% for a credit card run remotely such as over the phone with no supporting info except expiration date. The information that merchant has about the card, it's owner, it's billing address, it's security features, etc, the lower the percentage rate.

 

[devil21]

No. Your debit card has all the same anti fraud protections as the credit card.

This appears to actually depend on the issuing bank. If the bank has different liability limits on debit than on credit/check cards I guess the bank could have to eat more fraudulent charges on credit transactions than debit, which could explain some of the higher fees. Sure is a complicated topic though and a bunch of conflicting info found after only a few minutes of searching around. Glad I dont have to deal with it. Fwiw, I don't like punching in my PIN for anyone to see so I always use my check card as a credit transaction

 

[Kludge]

As a merchant, they charge the merchant more for credit card transactions than debit card transactions. Essentially, by using it as a credit card, they are taking an extra .5-2% from the merchant over the debit card. Feel free to keep transferring money from your local store to the big banks if you want, but as a small business owner, I'd prefer you reserve that option for Walmart and Starbucks.

Right. To make it profitable for myself, I most often end up buying $1-$5 Chinese/Taiwanese goods from Meritline. - And it's going to a credit union. Actually, discounting the money held in the CU & other services I use for a fee, it's ultimately going to me.

 

[Captain Bryan]

I've been thinking of joining a credit union for a while now. I just don't want to deal with moving all my bills over and such.
Do CUs have identity theft protection?

 

[WilliamShrugged]

I heard from a banker there today that this is a pilot run on the plan, and that its only in five states (i only know of NV being one).

 

[WilliamC]

There's still free checking accounts but it's buyer beware when looking for them.

http://www.bankrate.com/finance/checking/free-checking-make-sure-it-s-really-free-1.aspx

I'm mainly using my checking account merely to clear what few checks I still write each month, I try to do most things with cash.

While it's still legal to use cash that is.

 

[Fox McCloud]

Yay for government regulation driving up the price of consumer goods =T

 

[MozoVote]

This doesn't strike me as all that unreasonable. Banking *is* a service and it costs something to provide.

Checks cost about ten cents each to order and have mailed to you. So 30 electronic transactions a month is roughly the same cost.

 

[Humanae Libertas]

Charging you for using your own money. Gotta love it...

 

[Fox McCloud]

This doesn't strike me as all that unreasonable. Banking *is* a service and it costs something to provide.

Checks cost about ten cents each to order and have mailed to you. So 30 electronic transactions a month is roughly the same cost.

I wouldn't have a problem with it, normally, but it's the fact they weren't doing it before...and now they are....not because they want to, but because the government has set the "price" for a good related to the debit card.

 

[angelatc]

I wouldn't have a problem with it, normally, but it's the fact they weren't doing it before...and now they are....not because they want to, but because the government has set the "price" for a good related to the debit card.

You're right - banking is so tightly regulated it can't legitimately be considered a business that's free to set their own price structures. If one bank was doing this because it thought it was a good idea, nobody here would care. But this isn't about that.

 

[2young2vote]

You're right - banking is so tightly regulated it can't legitimately be considered a business that's free to set their own price structures. If one bank was doing this because it thought it was a good idea, nobody here would care. But this isn't about that.

I keep having people tell me that starting in the 80s and continuing until around 2008 that banks were almost entirely unregulated. Why do they tell me this and what are some examples i can give of regulation or government intervention into the banking system other than FDIC and the federal reserve playing with the interest rates?

Wells Fargo is the only on-campus bank at my school. I can't use them because they don't have a branch anywhere near my hometown, and I probably wouldn't use them if they did.