Reduced Interchange Fee Goes Into Effect Tomorrow

What's Hot

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

This Free Software Brings Old Laptops Back to LifeMore

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Report: Walmart to Begin Selling CarsCars

Is Your TV Tracking You? Here’s How to Tell — and Prevent ItAround The House

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

Where to Sell Your Stuff for Top DollarAround The House

11 Staging Tips to Help You Get Top Dollar When Selling Your HomeAround The House

8 Tuition-Free U.S. CollegesCollege

10 Overlooked Expenses That Ruin Your BudgetFamily

4 Car Insurers That Might Raise Rates Even When the Accident Wasn’t Your FaultCars

How to Invest If Trump Kills the ‘Fiduciary Rule’Grow

20 Simple Hacks to Make Your Stuff Last LongerAround The House

12 Surprising Ways to Wreck Your Credit ScoreBorrow

This Saturday, merchants will be paying less for processing debit cards. Will consumers get the price break promised by retailers?

The following post comes from partner site

New interchange fee regulations go into effect this Saturday, Oct. 1, but many consumers are already experiencing some painful consequences.

New rules that will cut the cost of the interchange fee for merchants have already helped trigger more fees for debit card use, increased some monthly charges on checking accounts, eliminated most debit card reward programs, and may end the convenience of using a debit card for small purchases.

Consumers may give little thought to the interchange fee charged every time they swipe their debit card, but that fee can take a significant bite out of a retailer’s profit for certain transactions. Before the recent legislation, the interchange fee averaged 44 cents per transaction. Now, the reduced fee will be 21 cents, plus an additional amount to cover losses from fraud. The Fed’s rules are part of the 2010 Dodd-Frank financial overhaul law, and the changes only apply to debit cards.

“While retailers celebrate the arrival of interchange fee regulations that they fought hard for, banks are forcing consumers to help make up the lost revenue,” says Bill Hardekopf, CEO of “It would be nice if retailers lowered prices to pass some of their savings on to consumers.”

While merchants celebrate, banks scramble to find ways to replace billions of dollars lost by one more federal regulation. Banks can’t absorb this loss and, just as they have warned, they are creating new fees to raise revenue.

Here are some ways that banks have recently made up for the loss of revenue from regulations:

New fees on debit card usage

Many banks are testing a monthly fee on consumers who use their debit card. Wells Fargo is testing a $3 monthly fee for debit card users in five states: Georgia, Oregon, New Mexico, Nevada, and Washington. Chase tested a monthly fee for debit card users in Wisconsin. In October, SunTrust will add a $5 monthly fee for debit card purchases on its basic checking account, and Regions will charge $4 per month for debit card purchases. Consumers can still find banks that do not charge a fee for debit card usage, such as Citibank, Capital One, and many smaller banks or credit unions.

Less “free” checking

Only 45 percent of non-interest checking accounts are free, down from 65 percent in 2010 and the peak of 76 percent just two years ago, according to’s 2011 Checking Study.

Many banks advertise free checking, but the fine print may contain stipulations. The most common are the offer to waive monthly fees as long as your balance is above a designated amount, or for you to deposit a specific amount each month. The fee could also be waived if you have multiple accounts.

As an example, Bank of America is shifting checking customers over the next year into new accounts that have higher balance requirements or other conditions to get free checking. One new product is called Enhanced checking and customers must make deposits totaling $2,000 a month, keep at least $5,000 in various accounts, or use a bank credit card at least once a month to avoid a $15 monthly fee. An eBanking account lets customers avoid a $12 monthly fee if they sign up for paperless statements and make all deposits and withdrawals online or through an ATM.

Monthly statement costs

Banks encourage customers to use online statements by charging to mail paper statements. BBVA Compass will charge consumers $3 per month to receive a paper statement on many of their accounts.

Reduced debit card reward programs

Many customers used to receive rewards for using their debit card. Some banks have already reduced or eliminated their debit rewards program. Wells Fargo, SunTrust, Chase, and U.S. Bancorp are among those who have made significant changes to their rewards programs. Citibank and U.S. Bank continue to offer reward points for debit card usage if you have a personal checking account linked with qualifying products and services.

Possible increases in merchant fees for small transactions

According to The Wall Street Journal, Visa and MasterCard are discussing raising fees merchants pay for small-ticket debit purchases to 23 cents per transaction. Merchants currently pay about 8 cents for small-ticket items. Some retailers, especially gas stations and convenience stores, are setting $5 or $10 minimums for a debit card purchase. “Consumers should pay close attention to their bank notices and account statements. That is how banks are informing their customers of these changes. It is our responsibility as consumers to be aware of these changes. Being uniformed could cost a lot of money,” says Hardekopf.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 14 Ways to Maximize Your Social Security Checks

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,822 more deals!