With no fees for transactions, no debt added to high-interest credit cards, zero-liability fraud protection and new rewards programs, the check card is proving to be a grand slam for consumers.
Check card fees for transactions, whether PIN or
signature, have nearly disappeared, according to an exclusive Bankrate survey.
Bankrate researchers surveyed the 10 largest banks
and thrifts in 10 top markets and gathered their check
card policies and fees. Only seven of the 100 surveyed institutions
charge a point-of-sale, or POS, fee for PIN transactions. Five of
those charge per transaction and two charge a monthly fee.
Check cards have become nearly universal. Of the
100 banks surveyed, only three do not offer check cards. Of those that do, only
two banks -- Bank of the West in San Francisco and Firstrust Savings Bank in Philadelphia
-- charge an annual fee to have a card.
is very good news for consumers, who have embraced check cards as their preferred
purchasing plastic. Since 2003, check cards have been used to make more purchases
than credit cards, according to the Federal Reserve.
"The competitive environment for banks demands
that they position themselves to the consumer as offering low-cost
checking accounts," says Tim Sloane, director of the Debit
Advisory Service at Mercator Advisory Group, a payments-industry
research firm. "Core to the value proposition for consumers
is debit cards. The once-common practice of charging transaction
fees on debit cards has disappeared."
Greg McBride, CFA, senior financial analyst at Bankrate,
"Point-of-sale fees for PIN-based debit card
transactions appear to be more myth than reality," says McBride.
"Nonetheless, cardholders should always verify the terms with
their issuers to avoid being surprised."
For signature transactions, only Wells Fargo has
a fee, and that is $1 per month for some customers, regardless of the number of
"Some customers -- depending on account type
and applicable waivers -- are charged a $1 usage each month in which
they make a purchase using their check card or their ATM card,"
says Lisa Westermann, a spokeswoman for Wells Fargo. "The fee
is charged for unlimited PIN-based and signature-based point-of-sale
transactions and is only charged if either card has been used for
point-of-sale purchases during the statement cycle."
rise of debit card use is attributable to several factors, primarily money management,
convenience and security. "Significant awareness was raised about the high
interest rates charged by credit cards and the fees for late payments," says
Sloane. "Consumers have been educated about the benefits of debit cards.
Consumers see it was a way to budget their money more effectively."
the 2005/2006 Consumer Payments Usage study, the most important things to consumers
were convenience and security.