Banks New Cash Cow is Debit Card Fees
As the new credit card laws have been passed banks have found that one of their major sources of profit is being extinguished. They’ve responded by trying to squeeze in rate increases right before these laws have been enacted. This has left a whole lot of their consumers disgruntled about being involved in the credit card game. Consumers response has been to switch to using debit cards a whole lot more. The use of debit cards has increased dramatically since the new credit card rules have been enacted. This past year has been the first year ever where the amount of debit card transactions actually exceeded the amount of credit card transactions. according to the payments industry trade publication The Nilson Report, consumers are expected to spend $1.64 trillion with their debit cards next year, nearly two-thirds more than in 2006. Don’t think that banks haven’t noticed this.
Naturally know the banks have switched tactics and are looking into how they can make their money off people’s increased debit card use. CNNMoney has an interesting article today entitled “Banks’ Newest Game: Debit Card Fees”. This article details just how the banks are looking to replace their previous exaggerated cash flow from credit cards. They’ve devised sneaky ways to hit people up with fees for using their debit cards.
“Banks, just like airlines and local governments, are looking for fee income to fill the revenue gap,” said Greg McBride, senior financial analyst with Bankrate.com.
What is shaping up to be an area of focus for lenders are loyalty or rewards programs for debit card users.
A concept that has long been associated with credit cards, increasing numbers of banks have looked to such programs as a way to generate more fees from consumers.
These loyalty programs tend to suck you in by making it seem like your getting something for nothing, a concept that our country has always been a big fan of. These credit card companies though are very intelligent. Don’t think that their going to be getting the short end of these rewards programs. Often times the customer ends up paying a whole lot more for those precious reward points.
Under a typical debit card rewards program, for example, a consumer looking to earn a $100 credit towards an airline purchase would have to spend $33,333, according to research published by consulting firm TowerGroup.
Examine the terms of your debit card reward program very carefully just as you would the terms and conditions of a credit card. Oftentimes these reward programs charge an annual fee to be a part of and unless your spending a whole lot of money, its simply not worth it. Those precious points that you’ve been trying to accumulate may even expire before you get enough to do anything with them.
As with anything in regards to your finances the key is to do your due diligence and know exactly what your getting into before you sign up. There very well may be some rewards programs out there that suit the way you spend. The only way to be sure of this is to know exactly how the program works. All it takes is a little bit of research to find the good ones out there. Banks know that a lot of people simply don’t do this research. This provides them the ability to be sneaky and get people signed up for programs that are simply a lose lose proposition. Do your homework and you can beat them at their own game.
Why are banks allowed to manipulate deposits and withdraw dates in checking accounts to charge maximum overdraft fees? Fore instance on 11/22 I have $96.88 in my account I spent $2.00 at home depot , $3.00 at the supermarket , $20.00 at the gas station these withdraws are held/manipulated by the bank. On 11/25 a monthly billed automatic withdraw that the withdrawal date moves around/ manipulated by the bank of $125.00 was withdrawn immediately to overdraw my account and the charges made on the 11/22 the bank was holding/manipulating are withdrawn after the $125.00 so the bank can charge $35.00 each in overdraft fees on all 4 withdraws making $140.00 in fees for themselves underhandedly and on top of that for the last three years my pay check has been automatically deposited electronically. on 11/25 it was held/manipulated by the bank until 11/27 I feel these banks are above all laws and manipulate dates on a regular basis to underhandedly make multi billions for themselves and no one can stop them do the law makers and politicians get a cut this is one of many big money greed scams that is rotting the USA all you have to do is google “banks manipulate dates” and read thousands of stories. Why are banks allowed to award themselves punitive damages? is the only body that can award punitive damages is the court of law? is a clause in a contract that awards punitive damages illegal? Did the $2.00 overdraft cost the bank the $35.00 they charged me or was most of it profit/punitive damages? banks made $38.5 billion in 2009 on overdraft fees any of this above cost is punitive damages awarded by the banks not the court of law.