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I thought this article in the Washington Post was quitre interesting.
Banking Fees Are Rising And Often Undisclosed - washingtonpost.com
Basically it looks like banks in America have now decided to copy the massive charges that British banks levy on their customers. The difference is how the Post chooses to describe these charges.
This paragraph sums it up nicely:
"Banks are trying to maximize the revenue they're getting from fees, either to increase their profit margins or to make up for declining returns on assets and revenue from their core lending operations," he said. "Most people think their debit card is a safe way to do transactions because it's not like your credit card -- you can't spend money you don't have. But actually, banks have turned that on their head and are turning people's debit cards into credit cards with interest rates that are astronomical."
Its interesting that the fees American banks charge (while being very high) actually do seem to provide a service of sorts in that they will actually allow a transaction to go through rather than decline it. Then they will apply a rather stiff charge. There are still many problems with this but it is at least better than the main UK clearing banks which have DECLINED the debit card transaction or direct debit payment and STILL charged a fee.
This has got to be the crux of the matter. How can fees be for a service when EVERY 'request' for an increased overdraft or transaction was automatically declines and a fee still charged.
If banks charge £35 for daring to even attempt to spend money or credit that was not available to your account then how can the the type of charges levied by banks in the UK be anything other than penalty fees?
Banking Fees Are Rising And Often Undisclosed - washingtonpost.com
Basically it looks like banks in America have now decided to copy the massive charges that British banks levy on their customers. The difference is how the Post chooses to describe these charges.
This paragraph sums it up nicely:
"Banks are trying to maximize the revenue they're getting from fees, either to increase their profit margins or to make up for declining returns on assets and revenue from their core lending operations," he said. "Most people think their debit card is a safe way to do transactions because it's not like your credit card -- you can't spend money you don't have. But actually, banks have turned that on their head and are turning people's debit cards into credit cards with interest rates that are astronomical."
Its interesting that the fees American banks charge (while being very high) actually do seem to provide a service of sorts in that they will actually allow a transaction to go through rather than decline it. Then they will apply a rather stiff charge. There are still many problems with this but it is at least better than the main UK clearing banks which have DECLINED the debit card transaction or direct debit payment and STILL charged a fee.
This has got to be the crux of the matter. How can fees be for a service when EVERY 'request' for an increased overdraft or transaction was automatically declines and a fee still charged.
If banks charge £35 for daring to even attempt to spend money or credit that was not available to your account then how can the the type of charges levied by banks in the UK be anything other than penalty fees?
