Wells Fargo, debit cards and you

We've paid $3 for a gallon of gas. We pay almost the same amount for a gallon of milk. Now, you could be paying $3 to use your debit card.

A big story that has gotten some attention recently is Wells Fargo charging customers $3 a month to use their debit card. Yes, $3 to use your own money. Don't get too worried yet, Wells Fargo is trying it out in four states (click the title for the story); and it seems that it will only be for new customers.

Hold on, put yourself in the shoes of the PR professional assigned to that one. I can see it now: "Sign up with Wells Fargo, and pay only $3/mo to use your debit card." How many people do you think that PR campaign will draw in? I can't believe too many.

Banks are finding new ways to make money. With online banking becoming so popular, direct deposit and debit, online bill pay and so forth, they need to recoup some losses. TCF Bank here in the Twin Cities doesn't offer "free checking" anymore. There's a little caveat on that, though. It's free, if you maintain a minimum balance.

Not only online banking, but new regulations are also forcing the hand of Wells Fargo to do this. New financial regulations limit the amount of money banks can collect in fees when people use their debit cards.

So, what's happening here? We're already in an era where checks are shunned from so many retailers and restaurants. And, if people have to pay to use their debit cards which are attached to their own money, what's left? Go back to cash-only? Well, we could. But then the Fed Reserve would have to print more money, which would create more inflation.