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Chase Abandons $3 Debit Card Fee

Big bank decides against fee in wake of criticism against Bank of America.Chase won’t face the customer wrath Bank of America has seen, at least when it comes to debit card fees.

The nation’s biggest bank (it vaulted to that top spot recently) has abandoned its debit fee experiment.

We know we rarely offer big banks praise, but Chase deserves kudos here.

For eight months, the New York-based bank tested a $3 monthly fee for debit card usage in northern Wisconsin and Georgia.

When the pilot program expires next month, it won’t be renewed, a person familiar with the bank’s plans says.

Chase is dropping its plans in the wake of Bank of America’s acknowledgement it would begin charging customers a $5 monthly fee for using their debit card to make purchases. That plan has created a huge backlash.

Still, the person familiar with Chase’s decision says it wasn’t based on the negative reaction to Bank of America’s plans, but because customers prefer Chase’s Total Checking account, which doesn’t directly charge for debit cards and online bill pay.

This account remains fee free if customers have direct deposits totaling $500 a month, a $1,500 minimum daily balance or an average $5,000 daily balance in linked deposit or investment accounts.

Otherwise, Chase will charge a $12 monthly service fee.

Besides Bank of America, Wells Fargo, SunTrust and Regions Bank are or plan to implement debit card fees in response to regulations capping how much they can charge retailers in so-called swipe fees, when a card holder uses a debit card to make a purchase.

Such moves have prompted national Bank Transfer Day on Nov. 5, with consumers urged to make the switch from big banks to community banks or credit unions.

Many smaller financial institutions are riding the wave, touting their fee-free checking accounts and free debit cards.

We’ve featured several of those offers, including:

Unlike Chase, many of the best free checking offers don’t have monthly balance or direct deposit requirements.

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  1. Mike at Bankaholic said:
    on October 29th at 12:56 pm

    Wells Fargo apparently will abandon its debit fee test, as well. And Bank of America might be backing down a bit. http://www.latimes.com/business/la-fi-chase-debit-fee-20111029,0,5814255.story