10/05/2011 07:16 pm ET | Updated Dec 04, 2011

4 Ways to Avoid That Dreaded Monthly Debit Fee

It may seem that you have nowhere to run, and you are doomed to spend between $36 and $120 annually for your debit card. If you're like me, you're thinking, 'How can they charge so much for something that used to be free?' 'How can they charge me to use my own money?' 'What did we do to deserve this?' But sadly, answers to these questions wouldn't ease the pain or drop the price tag.

So, the only question I demand the answer to is, 'How do I make it stop?'

I have two checking accounts -- one at Wells Fargo and another Chase Bank. Both of these banks have begun charging monthly fees, even though the fees have yet to reach my area. Wells Fargo has a $3 monthly fee and Chase has a $5 monthly fee, with these new changes, I'm set to pay about $100 a year.

That's four $20 dollar bills that I do not want to give up.

So I've been researching ways to skirt these new debit card fees. According to a poll at the Wall Street Journal, I'm not alone. 93.9% of the 9,415 people surveyed said that they would not pay the monthly debit fee. Many of these consumers will read through stacks of fine print in order to find the best low or no-fee debit card. But the best checking account and debit card could be right under your nose. Many local non-profit credit unions and community banks continue to offer low interest credit cards and free checking accounts. Credit unions also offer low-interest mortgage and auto loans -- all below 18%. Credit unions are very similar to banks, and their storefronts and ATMs can be found in every state. The only thing is that ATMs might not be as abundant or strategically located as the major banks. If you choose to take your money to a credit union or local bank, make sure there are enough ATMs close by because if not, you could end up paying up to $3 per ATM withdrawal if it's outside your bank network.

Credit unions are a good option for new cardholders who are looking for a new banking home, but for longstanding consumers who are having trouble cutting the umbilical cord, negotiating with the bank may the best option-- especially if you have multiple or high balance accounts. Bank of America announced that once it begins charging its $5 monthly debit fees early next year, it will exclude "premium" customers who maintain high daily average balances. Chase cardholders in Wisconsin who maintain an account balance of over $1,500 are exempt from the $3 monthly fee.

If you bring the bank a lot of money and business, then it's worth a shot. The worst thing that could happen is you hear 'no'." And if you get a 'no,' explore some of these options below.

1. Cash is King. To some, paying with cash is like bartering cowry shells -- an old and dated practice. But, by simply using cash, you could save yourself a decent amount of money. When carrying large amounts of cash, remember to be mindful of where you put it, and don't keep it all in one place. Because once you lose it, there is no getting it back. I suggest going to the ATM right before the purchase and withdrawing the appropriate amount.

2. Use a Credit Card. With all these fees, it may not be the best time to use a debit card. If you have discipline, a credit card could help you out. You just have to pick a low-interest credit card and pay off the balance in full every month. A study from, a credit card research website, revealed that the consumers most angered by the new debit card fees, would begin using more credit cards instead. According to Arnold Taubman, chief economist at, "A credit card is only a good option if you remember to pay off the balance, or else the interest you rack up on the credit card would be more than the monthly debit card fee." If you decide to discard your debit card altogether, and open up a credit card instead, it may be in your best interest to open up an online credit card. Online credit cards allow you to apply for the credit card you're seeking from the privacy of your own home. Consumers are usually e-mailed instantly upon approval or denial, but some cases can take up to six weeks.

3. Use Online Checking. Many banks have options where you can pay your bills online. Banks such as Chase have online bill payment programs that just ask for your account number and then set it up with the appropriate company. The bill payment is not an automatic deduction, and you are always in control of how much you pay.

4. P2P transfers. P2P stands for person-to-person transfer. This technology is brand new. PayPal and Square are two platforms that allow consumers to pay for items using their smart phone or their e-mail account. With P2P, consumers can transfer money from each others' account, whether it is a checking, prepaid or credit card account. P2P and platforms like it hope to be the norm in the future. In a couple of years, expect to see an increase in virtual and other mobile payment systems.

Debit fees can be avoidable if you know what to do. But, I warn you that it might take some getting used to. Personally, I am not ready to split ways with my debit card. It offers me too much convenience and saves me the burden and responsibility of carrying cash around. And I'm not interested in opening up a new credit card, because I know myself and my spending habits. I think I'm going to take my business to a small-town local NYC bank and let my funds sit there for no-fee. So, if you're like me, and are not ready to dish out that extra money -- get smart about using your debit card.