How to Avoid the New Debit Card Fees

Banks like Bank of America and Regions are going to start charging fees for the use of Debit Cards. Recently a new law passed, regulating what banks can charge retailers for allowing the use of Debit Cards. As a result, the bank revenue from this is dropping by 50%.

So instead of this law making things better, it makes it worse for those of us that are banking with these banks, because now we have to pay to make up the difference (don’t you just love new laws that are supposed to help consumers??). Those who use Debit Cards will now have to pay a $5 a month fee to do so. This fee will be taken out of your account even if you only use your Debit Card one time. Check with your local bank, to see if you will need to start paying for the use of your Debit Card.

Here is how you can avoid these new Debit Card Fees:

1. Change banks and go with a smaller bank (the smaller banks are not affected by the new regulation). Most of these smaller banks are not charging a fee for use of your debit card.

2. Every time you use your Debit Card, run it as Credit instead of Debit.  The new laws do not apply to Credit Card companies, so running your Debit Card as Credit means your bank avoids the new regulation, and won’t charge you for the use of your Debit Card. This does mean that you will have to show your ID with your Debit Card, and sign a receipt instead of just putting in a pin number. The money still comes out of your bank account, the same that it would if you ran your card as Debit. Note: This is what I learned while listening to NPR last week. Check with your bank to make sure it is correct.

My bank is going to start charging for the use of Debit Cards, and they are also going to start charging for me to have an account with them. Guess who’s going to be switching banks? That’s right, me! Is your bank going to be charging you for the use of your Debit Card? You can leave a comment by clicking here.

Photo courtesy of FrannyWanny

By |2013-12-08T10:17:53-04:00October 6th, 2011|Finance|17 Comments

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  1. The Happy Housewife October 6, 2011 at 5:07 pm - Reply

    I’m not sure about #2. I think if you are using a debit card at all, either for debit or credit you will still pay the $5 fee.
    I’ve seen it explained on several news sites and Trent (The Simple Dollar) wrote about it here.

    Hope that helps!


    • Crystal Collins October 6, 2011 at 5:58 pm - Reply

      Thanks Toni! I was listening to NPR the other day, and thats what they said to do to avoid the fees. I guess everyone should verify with their bank.

  2. lara October 6, 2011 at 5:10 pm - Reply

    actually, wells fargo informed me that it doesn’t matter whether you push credit or debit, the fee still applies because it’s the card in use, not the method of payment processing. so the only way to avoid it appears to be to go to a smaller bank or credit union which is a major hassle to do when you have a bunch of bills set up to be paid automatically and direct deposits, etc.

    • Amy October 6, 2011 at 10:15 pm - Reply

      Please make sure that you’re in an area that’s even charging the fee before switching!

  3. Tshanina October 6, 2011 at 5:13 pm - Reply

    Thanks for the post Crystal! I’m sure most people don’t know that their bank is going to be charging check card fees.

    I am a Regions customer. Before switching banks check to see if you qualify for the Lifegreen Preferred checking account which doesn’t have a fee. We qualified for it and saved the hassle of switching accounts.


  4. Ann October 6, 2011 at 5:21 pm - Reply

    The new charge doesn’t bother me. Small local companies have struggled paying the fees so I’m happy to pay if it means more convinence for me (more places will start accepting check cards and not just cash) and small stores get more business!

    • Crystal @ Coupon Out of Debt October 7, 2011 at 10:20 am - Reply

      I don’t think that is how it is going to work…I am all for small businesses, my father owning one for 25 plus years. But I do not agree that bank fees will make this happen.

  5. Melissa McK October 6, 2011 at 9:05 pm - Reply

    I’m glad we are currently at a credit union. I would not be paying a fee. I have no pity for the banking situation so I feel no need to give them any more money 🙂 My mom is a small business owner and so far I am not aware of how this is helping her yet, but hopefully some good comes out of it.

  6. Beth October 6, 2011 at 9:18 pm - Reply

    i’ve read a few times that BofA will charge even if you swipe your debit as a credit…any use of it will cause the fee

  7. Angela October 6, 2011 at 9:27 pm - Reply

    Suntrust is changing too next month!!

  8. JT Locke October 6, 2011 at 10:12 pm - Reply

    All of my bills are set up on automatic bill pay. It would be more of a hassle to switch banks and reset all my automatic bills (if the smaller bank even offered that feature) than to pay the $5. Also, small local banks and credit unions are not in the towns where I travel. If I’m traveling, I like the convenience of being able to walk into the bank and take care of my business if I need to do so. Paying $5 for the use of a debit card is not enough to make me switch banks and lose that convenience. I’m staying with my bank.

  9. Anna Holmes October 6, 2011 at 11:09 pm - Reply

    Regions bank is going to have debit and checking fees. The debit card fees are the same for everyone. Checking account fees depend on the balance or if you have a direct deposit of a certain amount. Students are exempt from the checking account fees but not the debit card fee.

    Compass Bank is doing the same thing. I have had indepth conversations with both.

    Also, a long banking history is critical when some people are looking at buying homes, cars ect. or even college loans. Even seniors don’t get a break. There is no break for people over 50 either.

    There is always the option of using a credit card or writing a good old fashioned check.

  10. Stephanie October 6, 2011 at 11:56 pm - Reply

    Thank you for this post. My husband and I have been talking about what to do to avoid these fees. Very informative

  11. Misty October 7, 2011 at 12:17 am - Reply

    We try to use cash as much as possible other than using the Bill Pay option. Now this will require us to be more consistent in that method which will give us more control over our budget since we have gotten somewhat lazy with using “envelopes”. I’m not happy about the fee my bank, Wells Fargo, will start charging next month. However, it is what it is and I agree with PP about liking the option to walk into a bank or use an ATM anywhere since I’m with a large bank. If you go with a smaller bank you will combat the ATM charges when you can’t find one to use. Also, we can always go back to writing checks again. I refuse to let the bank take anymore of my money. They already got me on transferring from savings to checking.

  12. Michelle October 7, 2011 at 12:23 am - Reply

    Small local bank here, no fees thank goodness!

  13. Vanessa October 7, 2011 at 8:46 am - Reply

    Wells Fargo starts their debit card fee’s next week in Georgia. As a quick solution, I took a few seconds to sign up for an ING Checking account. It’s quick since I already have savings with them. This way I’ll still have a fee free check card and I don’t have to change any of my current accounts. I agree that it’s a lot of hassle to switch all my automatic banking/checks/direct deposit to another bank. Eventually I’ll find a credit union and set up accounts that way. I wouldn’t consider paying a $5 charge to use my debit card for a purchase. If I end up paying it even once, I’ll be leaving the bank very quickly.

  14. Julie J. October 9, 2011 at 4:00 pm - Reply

    I am a B of A card holder, so I went in there and talked to one of there advisors and this is what they told me…..1. If you are an advatage card holder there will not be any fee for using your debit card. Being an advatage account holder you are elegible for 2 checking accts. and 1 savings account. In order to be this you have to either have a min.monthly balance of $1500 or more daily balance or have automatic check deposits. which i have neither so i changed my account to an E-account which is… you do everything thru the atm’s deposit your checks. By doing so you do not have have a min.balance and there will be NO charge for using your atm card anywhere.

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