Banks to Start Charging Debit Card Users?

[OutofDate1980]

Apparently they didn't since the prevailing philosophy in Washington seems to be that corporations are evil and make too much money and they need to be punished in some way. We do this by raising their taxes and operating costs. They pass this on to their consumers and everyone is shocked and this somehow reinforces how evil they are.

Monopolies and oligopolies are evil, they are the antithesis of capitalism. If banks are to big to fail, then they are to big and should be broken up. There are laws already on the books to do so, but the cash inflow to our leaders deter enforcement.

 

[Frisco]

Monopolies and oligopolies are evil, they are the antithesis of capitalism. If banks are too big to fail, then they are too big and should be broken up. There are laws already on the books to do so, but the cash inflow to our leaders deter enforcement.

The long term effects of that can possibly be devastating. We're seeing the first throes of it now, with the mammoth national debt and chain reaction recessions world wide.

As I was saying in another thread, the only hope is for these mega rich whales to come to the understanding that they'll lose everything unless they get together and work on a remedy that has the little fish, most people on Earth, at the center of the action, instead of government bailouts for themselves.

 

[lordofthereef]

I don't know if I agree with that. Let's take Google and Android for a second. Now, Google spends tons of money and manpower on developing Android, but gives it away free. Why? Because they make money on the mobile ad revenue and mobile search not to mention the sale of apps and other mobile content. No one has any issues with that. The mobile revenue that Google gets justifies it spending it's time/money on developing Android.

But let's say that, for some weird and bizarre reason, some law is passed that severely cuts into the revenue Google makes off Android to the point that the mobile revenue is significantly less. Would you think it was immoral if Google started charging a licensing fee to OEMS for using Android?

If they are in the black, yes. You are comparing BANKS to other COMPANIES though. I do not think they are quite synonymous.

BUT, the comparison is a bad one. The point of the law (which obviously wasn't thought quite through) was to lower abuse. At a 3% rate, that is MORE than covering the average operating cost plus profit of a debit card. Am I somehow expected to believe that it somehow costs more to run a $1000 transaction than a $10 one? No. In fact, based on their new $3 charge, they are basically stating that a single $1000 charge would have previously paid for nearly a year's worth of operation.
There is no foreseeable reason for there to be a law on ad revenue with Google. They are completely different things in just about every way I can imagine.

I will mention this again, as it seems to have been missed. Will Google EVER get a government bail out? NO CHANCE IN HELL. Another giant reason why these are polar opposite situations. Also, perhaps future models of android would cost money to buy, but those that currently have the OS/service aren't going to be retroactively charged for something they already have.

 

[lordofthereef]

Everyone can change financial institutions.

Example:

I use Alliant Credit Union based out of Chicago. I live in Ohio and have never lived in Chicago.

I made a $10 donation to an organization to get this account, but now I can scan deposit checks at any time (instant credit after 4 months of account in good standing), can withdraw money from ANY CU ATM, and deposit money into most big bank ATMs at no fee (US Bank, Bank of America, and Huntington to name a few).

Just thought I would mention that Well's is not the only bank considering this. If the public is generally accepting, we will see $$ signs in the eyes of said financial institutions everywhere.

I am a student. For various reasons it is not feasible (though also not impossible) for me to switch banks for at least another year.

 

[A.Nonymous]

If they are in the black, yes. You are comparing BANKS to other COMPANIES though. I do not think they are quite synonymous.

I disagree. There are certainly immoral ways to make money and I think these banks in question have engaged in quite a few of them. I don't think it's immoral to raise prices for a good/service when the costs of delivering that good/service go up and cut into your profit margins.

The point of the law (which obviously wasn't thought quite through) was to lower abuse. At a 3% rate, that is MORE than covering the average operating cost plus profit of a debit card. Am I somehow expected to believe that it somehow costs more to run a $1000 transaction than a $10 one? No. In fact, based on their new $3 charge, they are basically stating that a single $1000 charge would have previously paid for nearly a year's worth of operation.

This is the main problem with the law. The philosophy behind it is something like, "The bank is making big money off this. This is wrong. It must be stopped." That's just bogus reasoning. Credit card companies charge on a scale to process payments. It doesn't cost them more to process a bigger payment than a smaller one. But you could apply your logic to lots of things. The 32 GB iPad costs ~$100 more than it's 16 GB counterpart. There is no way you can convince me that it cost Apple $100 more to add an additional 16 GB of space. Clearly Apple is tacking on extra money there that is just pure profit. Am I mad at them over it? Not at all. Should there be legislation to keep them from doing that? Not at all. Is it immoral? Not really in the grand scale of things.

Also, perhaps future models of android would cost money to buy, but those that currently have the OS/service aren't going to be retroactively charged for something they already have.

I didn't think they were going to go back and retroactively charge people.

 

[lordofthereef]

Again, you are comparing Apple to a bank, one which received a ton of bailout money paid by our taxes. I don't think I have anything more to say on the matter as you continue lumping banks together with any other company out there. I have pointed out multiple reasons why they are not and should not be considered the same. There is clearly an inability or unwillingness to recognize this.

 

[Vehtemas]

I agree with the guy above, as I already said I you can join a Credit Union in Chicago from across the US, you can also join DCU.org (AKA Digital Federal Credit Union) from anywhere in the US, that allows scan deposits and withdraws the same was as Alliant.

Why am I with Alliant over DCU or others? Because when I needed a car loan they were the only one that offered me one, so they have earned my loyalty.

If you don't like what a business YOU do business with does, then change it.

Nothing is impossible, just difficult, it is up to you to determine whether the benefits are worth the difficulty.

 

[lordofthereef]

Vehetmas,
This is all fine and good until your bank adopts the same policies.

 

[Vehtemas]

Vehetmas,
This is all fine and good until your bank adopts the same policies.

I do not use a bank, banks are for profit and need to make money for a shareholder.

Credit Unions are not for profit and only goal is to run their money back into the member owners (which is everyone).

Every member has a share savings account meaning they own a share of the financial institution, their entire goal of operating is to turn the profits back into the members for lower loan rates and cheaper operation.

Also the board that controls and changes things in a CU is a volunteer position, they are not paid.

While some CU's may implement this, I highly doubt the majority of them will.

I have also asked my CU and they said they have no intention of changing their policy or billing procedure. Alliant is one of the biggest CUs in the US, and if they aren't going to change I doubt most will.

*Edit*

My point is that if you do not like doing business with people that do that, CHANGE your business.

If you do not like paying X for checking, look around town, find a CU or Bank that doesn't charge it and change.

Or, move to a more online based checking account, Charles Schwab or Ally Bank are a couple.

If you don't change then you have no right to complain when they take all your money.

It is like shopping at Coach and complaining they charge you so much for a backpack vs walmart but refusing to shop at walmart,

 

[lordofthereef]

I certainly understand and agree with your point. Still, how often do we hear "we have no intention to change policies" right before policies change? All too often, I think.

I also find it worthwhile to discuss reasons one may be unhappy with any particular business, both publicly, and certainly with representatives. Simply ceasing any and all business is an option too, but it also gives very little feedback as to why you have left.

 

[lordofthereef]

Doing a little more reading, it seems that small institutions (read: Credit Unions and small banks) are not limited by the debit card cap, which turns out to be about 25 cents per swipe. In short, they are still getting their 3%, as they always have.

Credit Unions: We Won't Charge Fees on Debit Cards | WSAV TV

 

[lordofthereef]

Credit unions fear debit changes | Bankrate.com
Another interesting article for how/why fees/changed fees are problematic to banks and credit unions big and small.

 

[Vehtemas]

I 100% agree, however if banks introduce $3 fees and then lose hundreds of thousands of clients they will get the message I think.

 

[lordofthereef]

I am not certain they will lose hundreds of thousands. If they do, and all of those people flock to credit unions, said credit unions may become large enough (I don't know this, just speculating) to have their 3% dropped to a mere 25 cents per transaction.

 

[Vehtemas]

I am not certain they will lose hundreds of thousands. If they do, and all of those people flock to credit unions, said credit unions may become large enough (I don't know this, just speculating) to have their 3% dropped to a mere 25 cents per transaction.

I am simply making the statement that if they lose enough clients they will realize that they cannot get away with it.

Again, I am 99% certain banks just want to retain their giant profit on debit card transactions, hence them charging people $3 a month.

If $3 a month covers all the transactions that pays for 12 debit card transactions... 12...

 

[lordofthereef]

I understand what you are saying. I was just adding my own commentary is all.

 

[Vehtemas]

I understand what you are saying. I was just adding my own commentary is all.

I know...

Sorry if I seem annoyed I am just tired of greedy SOBs taking advantage of people with little choice in the matter...

It is ridiculous, banks have always made crap tons of profits, or we bailed them out if they got in trouble, THEN they have the gall to try this crap?

Gahhh!

Not to mention it is unfair that they make banks that do NOT take advantage of people look bad...

 

[lordofthereef]

I too am annoyed, which is why the start of this thread. Also the reason why morality comes up so many times in my posts. Clearly I would be a crappy businessman, because I care about things other than the bottom line. While the bottom line is certainly important, caring solely about maximizing profits hurts everyone, perhaps even those profiting, in the long run, SO... perhaps I won't be so bad after all.

 

[Vehtemas]

I too am annoyed, which is why the start of this thread. Also the reason why morality comes up so many times in my posts. Clearly I would be a crappy businessman, because I care about things other than the bottom line. While the bottom line is certainly important, caring solely about maximizing profits hurts everyone, perhaps even those profiting, in the long run, SO... perhaps I won't be so bad after all.

You wouldn't be a bad businessman at all.

I have three friends who run their own businesses, one has a tech repair shop, one a restaurant, and one who has a massage parlor.

All three of them focus on customer satisfaction first and foremost, they do NOT focus on profits and they have flourished because of it.

If you take care of your clients, they will come back and reward you with business.

 

[A.Nonymous]

Again, you are comparing Apple to a bank, one which received a ton of bailout money paid by our taxes. I don't think I have anything more to say on the matter as you continue lumping banks together with any other company out there. I have pointed out multiple reasons why they are not and should not be considered the same. There is clearly an inability or unwillingness to recognize this.

Banks are businesses as much as GM or Apple or the local guy who makes and sells widgets.

 

[lordofthereef]

Banks are businesses as much as GM or Apple or the local guy who makes and sells widgets.

But none of the above (with the exception of the bank) is awarded tax money in the form of a bailout when they get into sh&^. EDIT: GM would be one of those, apologies. Did they arbitrarily start increasing fees on certain services because they felt like they weren't making enough? I don't know the answer to that question.

 

[A.Nonymous]

But none of the above (with the exception of the bank) is awarded tax money in the form of a bailout when they get into sh&^. EDIT: GM would be one of those, apologies. Did they arbitrarily start increasing fees on certain services because they felt like they weren't making enough? I don't know the answer to that question.

I am sure if the government passed environmental regulations that increased the costs of tires that the price of cars would go up to reflect that. The banks didn't just "feel like they weren't making enough". Regulations were passed that cut into their profit margins. They're going to make that back somewhere.

 

[noah way]

Regulations were passed that cut into their profit margins. They're going to make that back somewhere.

Regulations were passed that were supposed to protect consumers from gouging, such as credit card fees.

 

[A.Nonymous]

Regulations were passed that were supposed to protect consumers from gouging, such as credit card fees.

The motivations may have been noble. I won't dispute that. The thing is that any time you cut into a companies bottom line they pass the costs along to consumers. Every single time. It never changes. But regulators on capital hill never ever realize this. Then they seem shocked and horrified when it happens.

 

[Vehtemas]

The motivations may have been noble. I won't dispute that. The thing is that any time you cut into a companies bottom line they pass the costs along to consumers. Every single time. It never changes. But regulators on capital hill never ever realize this. Then they seem shocked and horrified when it happens.

Either they pass it onto consumers or they fire employees.

Either way someone pays for the lost revenue.

Unless they wanted to pass a law forcing banks to provide free debit card service.