Free checking at Wells Fargo is officially over.
Effective August 7, all Essential Checking customers will pay a $7 monthly service fee. Until recently, some former Wachovia customers were still able to maintain their original free checking accounts, a holdover from the merger of Wachovia and Wells Fargo in 2008. But that will end by late summer, Wells Fargo confirmed this week.
The cost to use an Essential Checking account will be $7 per month for all customers, although account holders who opt for paperless statements can get a $2 discount, paying $5 a month for an account. Customers can get around the service fee by maintaining a daily minimum balance of $1,500 or with direct deposits of at least $500 per month, the bank said.
The change affects customers in five states, including Florida, North Carolina, South Carolina, Virginia and Maryland, as well as Washington, D.C.
Wells Fargo has been phasing out its free checking over the past two years. In July 2010, the bank stopped offering free accounts to new customers, but some existing customers, including those who came from Wachovia, were grandfathered into zero-cost accounts. In March the bank announced it would start charging customers in six other states for their checking accounts, beginning in June.
"We make changes based on industry trends and what's going on in the economic and regulatory environment," Richele Messick, a Wells Fargo spokewoman, told The Huffington Post on Friday. Wells Fargo has said it costs the bank between $200 and $300 to provide a checking account.
Wells Fargo is based in San Francisco and acquired Wachovia during the 2008 financial crisis. The merger brought the Wells Fargo brand into new areas of the United States, including states in the South and Mid-Atlantic regions.
All banks are trying to find ways to increase revenue, which has been curbed by recent financial regulations on how they can charge overdraft fees, as well as rules limiting the money they can make from fees related to debit-card swipes.
U.S. Bank said this week it was increasing overdrafts fees to $35, up from $33. In April, the cost for a checking account at Citizens Bank doubled. And JPMorgan Chase is debuting a prepaid card this summer that will cost $4.95 per month -- a product that JPMorgan has said it wants to position as an alternative to a checking account.