That debit card may cost you|
debit card at the checkout register and there's an increasing chance that more
than the purchase price and tax will be subtracted from your checking account.
A fee for using the debit card also may be deducted. Debit card fees have been
around a long time but they used to be pretty rare; now they're much more common.
Signing helps your bottom line
The catch is that the fee is only assessed if you treat the purchase as a debit
and use your PIN to authorize the transaction. Press the "credit" key,
sign your name on the receipt and no fee is charged.
In a survey
by the New York Public Interest Research Group, 89 percent of the banks surveyed
tack on a point-of-sale fee of anywhere from 10 cents to $1.50 for PIN-based debit
transactions. While the survey looked only at New York-area banks, people all
around the country are finding these debit card fees on their bank statements.
Just as with credit cards, retailers usually pay a fee for
the processing of a debit card transaction. NYPIRG says a flat fee of 7.5 cents
to 10 cents is paid when the PIN is used and the transaction is processed "online."
If the customer signs for the purchase, it's processed "offline" and
the retailer's fee can be up to 2 percent of the transaction.
easy to see why many banks, which receive a significant chunk of that fee, want
customers to press "credit" and sign for their debit card purchases.
Customers who sign the receipt not only don't get charged a fee, they often qualify
for some sort of perk such as free air miles. Use your PIN and all you get is
your grocery bill and a fee.
At issue is whether the debit card fees are adequately
disclosed. The Senate Banking, Housing, and Urban Affairs Committee has expressed
concern that consumers may not be aware of the fees until it's too late. In other
words, not until they see it on their monthly statement. As a result, the Federal
Reserve is taking a look at debit card fee disclosure and is giving the public
a chance to voice their gripes.
Banks are required to disclose
the fee in the information you receive when you get a debit card. The fee is also
on your monthly activity statement. But unlike at ATMs, where you're notified
that a fee will be imposed with the transaction, there's no such notice on a debit
keypad at the point of sale.
senior federal counsel at the Washington, D.C.-based American Bankers Association,
says the current disclosure rules are adequate.