Are Excessive Bank Fees Getting You Down?
For years, people have relied on banks for a variety of services including mortgages, savings accounts, checking accounts, personal loans, credit cards, investments, and the list goes on and on. During this period of time, the majority of these people have said nothing in regards to bank fees, late charges, or penalties. However, things are beginning to change and people throughout North America are expressing their dissatisfaction with all of the many fees that a bank can now charge. Even ATM fees are getting higher, click here for ATM deals.
A bank can make an amazing annual profit simply by relying on all of these additional fees. In the past, a bank would only make money on the interest difference between saving accounts and loans or perhaps other currency exchange transactions. Today, we see many financial institutions making astronomical amounts of money because of all of these additional fees that were never charged in the past.
For example, there are many familiar credit card companies trying to increase their yearly profits by increasing their late payment penalty fees. If you have a balance of $1000 or more, for example, then you may pay a small penalty such as 5 dollars. On the other hand, if you have a balance that is less than 100 dollars then you may end up paying as much as 15 dollars for a late payment fee. There are also certain banks that charge late fees no matter what your balance is.
A recent statistic shows that the average American household has more than $8000 in credit card debt. Obviously, a late charge fee would affect a whole lot of people. Over the years, credit card companies have introduced higher late payment fees and shorter grace periods. This deadly financial combination makes it very difficult for anyone to pay on time.
Various fee and penalty charges make up an astonishing 30% or more of the profits for many banking institutions. There is no indication that these type of annoying fees will do anything but increase from year to year. The truth is that banks and credit card companies are notorious for introducing new types of fees each year. In fact, a consumer action group recently did a survey that showed that there was a rise in late payment fees from one year to the next from 47% to 69%.
There are some banks that provide a one strike penalty policy. This type of policy allows you to have only a one time over the limit or late payment. After your first offense, however, the bank will charge you a penalty or fee for any additional late or missed payments.
The bottom line means that the consumer will now have fewer days to pay off the entire bill to avoid a late payment fee. In the good old days, financial institutions typically allowed 10 or 15 days for the client to make their payment after their bill had arrived in the mail. Today, you will need to be quick with your payments because if they arrive even one day late, you will be penalized.