Debit cards: A good deal gets better

With no fees for transactions, no debt added to high-interest credit cards, "zero liability" fraud protection and new rewards programs, the debit, or check, card is proving to be a grand slam for consumers.
Debit card fees for transactions, whether PIN or signature, have nearly disappeared, according to Bankrate.com researchers who surveyed the 10 largest banks and thrifts in each of 10 top markets. Only seven of the 100 institutions charge a point-of-sale fee for PIN transactions. Five of those charge per transaction and two charge a monthly fee.
The public loves them Debit cards have become nearly universal. Of the 100 banks surveyed, only three do not offer them. Of those that do, only two banks, Bank of the West in San Francisco and Firstrust Bank in Philadelphia, charge an annual fee to have a card.
This is very good news for consumers, who have embraced debit cards as their preferred purchasing plastic. According to the Federal Reserve, since 2003, debit cards, which draw money from your checking account, have been used to make more purchases than credit cards, which are used to borrow money.
"The competitive environment for banks demands that they position themselves to the consumer as offering low-cost checking accounts," says Tim Sloane, the director of the Debit Advisory Service at Mercator Advisory Group, a payments-industry research firm. "Core to the value proposition for consumers is debit cards. The once-common practice of charging transaction fees on debit cards has disappeared."
Greg McBride, a senior financial analyst at Bankrate, agrees.
"Point-of-sale fees for PIN-based debit card transactions appear to be more myth than reality," McBride says. "Nonetheless, cardholders should always verify the terms with their issuers to avoid being surprised."

For signature transactions, only Wells Fargo has a fee, and that is $1 per month for some customers, regardless of the number of transactions. "Some customers -- depending on account type and applicable waivers -- are charged a $1 usage each month in which they make a purchase using their check card or their ATM card," says Lisa Westermann, a spokeswoman for Wells Fargo. "The fee is charged for unlimited PIN-based and signature-based point-of-sale transactions and is only charged if either card has been used for point-of-sale purchases during the statement cycle."