New caps on fees to process debit card transactions, which go into effect July 21, mean that banks will be making less money on each debit card transaction. To make up the difference, some banks are considering new debit card changes. These might include annual fees on debit cards, eliminating debit card rewards, charging higher withdrawal fees at ATMs for noncustomers, and capping the number or size of transactions you can make on your debit card.
According to Robert Hammer, chief executive of consulting firm R.K. Hammer in Los Angeles, consumers can count on annual fees for debit cards. Many have already begun, starting at $15 and going to $30 per year.
"Other debit card fees are unknown at present, but expect them in the next 12 months as banks adjust their business models from less interest to more in fees," Hammer says.
His advice to consumers: Read your mail, especially "change in terms" disclosures. Shop around and consider local or regional banks, not just money-center banks. Fees may be more attractive to a given consumer at the smaller banks.