Are they ever! Sure thing. Banks are definitely making a ton from planned overdrafts, ATM fees, Credit Card over limit and late fees, Etc. In fact I think I have found a title for my next book: I think I will call it – HOW TO CREATE WEALTH – CHARTER A BANK.
Then offer” free checking” and pre-approved credit cards. This would assure access to new accounts and customer’s money. Then at every opportunity assess their account for overdraft penalties. Then late payment, over-limit and pay-by-phone fees on the credit cards.
Then create utter confusion by merging with other banks, so the customer doesn’t remember who abused them the worst! Oh and by the way I wouldn’t have an ATM installed so I could charge the customer when they used another bank’s machine!
I remember my first bank-SALEM BANK- where I opened my first bank account while still in high school and continued with them for many years. This was in the days of your friendly banker when they basically had free checking and loaned money. You knew everyone in the bank from the president down to the janitor and you would usually receive a friendly greeting by the president of the bank on a daily or weekly basis while doing business.
Today’s banking is altogether different. Since most of our banking is done through the drive-up window we are seldom inside the bank. This is good for their business in that they don’t have to look you in the eye or shake your hand. This way you don’t really know who the shyster is!
How I long for SALEM BANK today! The bank is still there, but at last count it has been either taken over, or merged at least five times in 15 years. At one time it was PEOPLE’S, then UNION PLANTER’S. Before this most recent merger it was REGION’S, but now I’m not sure. The mergers are happening so fast I can’t keep up!
Yes they have free checking and the drive- up window, but as yet they still don’t have an ATM. Each time I use my ATM card for cash at an outside bank, the outside bank charges anywhere from $2.00 to $4.50 and my bank then charges my account $2.00 for each transaction. Maybe this is why my bank doesn’t have an ATM machine!
I was turned down by a bank that I had done regular business with for a number of years. Their excuse was that they were supposed to be concerned with my welfare. That certainly is a switch! I know for a fact that banks are making money from overdrafts. I can furnish proof of at least 3 times where I was charged an overdraft fee when the direct deposit was there, but they tallied the account check drafts before adding the deposit.
CREDIT CARDS- The number one demon, which are issued through banks, who are so concerned with our financial welfare. They’re so concerned with our welfare that after they issue us a credit card, the first thing they try to persuade us to do is turn right around and purchase credit card insurance, which of course is added on to your credit card at a high rate of interest.
As long as your card has a balance then this one item credit card insurance keeps your credit card balance going and you never get it paid assuming of course that you don’t pay your credit card off every month.
I say that if they’re so concerned about our welfare, let them pay for their own insurance. It’s their money that is being insured. After all, this is how they get away with charging 18 to 29 % interest on a credit card, because of the risk on unsecured credit. Also by buying the credit card insurance it makes the card holder more likely to go over-limit and have late fees then eventually become delinquent, because it increases the credit card payment.
Then it becomes even harder to pay and that just tightens the credit noose tighter around your neck. Why in the world would anyone want to purchase insurance to protect someone else’s money? That is exactly what we are doing when we buy credit card insurance!
They call it a security blanket to protect your credit. Oh, yes, I almost forgot. They are concerned about our financial welfare!
To sum it all up, you are paying an extremely high rate of interest on credit cards,
then the banks are asking you to pay for insurance on their money. What this does is guarantee repayment of the banks money at double your expense.
They are already charging exorbitant rates of interest on the card and are allowed to do so using the excuse that credit cards are high risk- since they are unsecured credit. So, they charge high interest because it is unsecured credit then sell you credit card insurance to make it secured credit. The “double whammy.” Talk about having your cake and eating it too! I say that if we buy credit card insurance then the banks should lower the interest on the cards, or buy their own insurance! So I would say yes. Banks are making plenty of money at our expense!