Her Two Cents

Because I kind of think debit card fees are a bunch of baloney. Is all.

You guys know how I feel about debit cards. (In summary: If you can use them responsibly, credit cards offer more protections. If you can’t, cash is safer because it doesn’t give people direct access to your checking account.)

But debit cards have their place. There’s a whole group of people out there who rely on them because they’ve sworn off credit cards, or because debit cards help them stick to a budget. (Curious? See Seven Secrets of Living Without Credit Cards, by yours truly.)

Now the banks are throwing a real wrench into the works. According to this article in the New York Times, a few places are testing monthly charges for debit card use.

Examples:

• Wells Fargo accountholders in five states (Oregon, New Mexico, Nevada, Georgia and Washington) will pay an “activity fee” of $3 a month if they use a debit card to make a purchase.
• SunTrust Bank accountholders with an Everyday Checking account now pay $5 a month to make a purchase with their debit cards.
• Regions Bank accountholders with a LifeGreen Checking account pay $4 a month to make debit card purchases.
• JPMorgan Chase accountholders in northern Wisconsin with a basic checking account will pay $3 to make debit card purchases. (Imagine, if you will, getting stuck with a fee just because you live in northern Wisconsin. Right?)

I find this fascinating, because if banks start charging fees for debit card use, it’s definitely going to tilt the which-card-should-I-use balance toward credit cards—and consumers in America have already shown a penchant for going pretty overboard in that arena.

Though I’m not personally a fan of using your debit card for everyday purchases, there are plenty of people who swear by it, and if using your debit card keeps you on track, far be it for me to discourage you. But if banks start charging for the privilege, what then? As much as I (and financial experts) suggest using cash to control your spending, I’ll be the first to admit that going cash-only involves a certain amount of inconvenience.

Would you pay $36 to $60 a year in order to swipe your debit card at the grocery store? Go cash only? Or favor credit because it’s fee free? (If you pay off your balance every month, of course.)

(Sandwich from Bonzeemer on Flickr.)