Banking Is Changing: You Will Pay The Costs
We are quickly approaching the age where your checking account is going to cost you some serious money. That is unless you maintain a significant balance in your account; even then you still may see a cost to do your banking. Here’s why.
With the recent rash of Federal regulations being placed on financial institutions and how they turn profits, it is quickly becoming harder for them to earn the way they used to. Does that mean that the banks will simply shrug off those lost earnings? Absolutely not! While the various regulations are meant to help consumers, they may actually be hurting them instead. The buck will be past to the consumer in some way in every single one of these cases. This is actually more likely to happen at a major institution as opposed to a small community bank or credit union.
The latest and possibly forthcoming act will be in favor of small business owners that are suffering just for being able to accept Visa and MasterCard. Every time a consumer uses there credit card or debit card, a business will have to pay the bank a minimum of 1% per transaction. The proposed bill would change that to a mere 11 cents per transaction. Banks have been aggressively encouraging customers to use their rewards card to earn them these fees off of the common average small business owner. For those who own gas stations, they lose on every gallon sold every time someone swipes a card at the pump.
If this bill passes, then banks will spend more on issuing and maintaining debit cards than they are earning. These reasons will likely cause banks to take away consumer reward incentives for using these cards. JPMorgan Chase has already eliminated rewards based debit cards, other major institutions are likely to follow.
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