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Saturday, October 25, 2014

Can the greed get worse?

Posted Wednesday, October 5, 2011, at 9:00 AM

Can their greed get any worse?

Now, some of the nation's largest banks, which issue debit cards, want to start charging a fee of up to $5 a month for anyone who uses that card.

The problem is that the banks were charging businesses about 44 cents every time you swiped your card. Congress recently put a limit on that of about 21 cents -- a figure that is four times higher than the actual cost to the banks to administrate each swipe of those cards.

So, they won't be losing money (a lot of us would love to be in a business that had a 400 percent profit margin). They just won't make as much. One bank estimated if it charged a $5 monthly fee it could generate more than $15 billion annually in profits.

Debit cards have become ubiquitous. They are convenient to use. Paper checks are becoming increasingly rare (and some banks charge if you use a check).

So, your options appear to be, put your hands in the air and hand the nice bank your money, or carry cash with you for all your purchases (which will cost the government a fortune if it suddenly has to put more "hard money" in circulation).

At a time when every citizen out there is watching their pennies, isn't a 400 percent mark-up over costs enough?


Comments
Showing comments in chronological order
[Show most recent comments first]

I agree it is wrong but what everyone needs to do and I mean EVERYONE should change banks, close their accounts. This is the only way they will get the hint that profit isn't going to happen this way.

-- Posted by Trouble2011 on Wed, Oct 5, 2011, at 9:23 AM

MtnHomer,

Do you know why?

I have begun using more cash instead of debit or check. Checks cost to order and as said, some banks charge for use of checks.

When you use cash, you would be amazed how much you actually can save, or what you really "don't" need. Watching those bills go from your hand to someone elses is hard to do. I have begun to realize that the convenience of a debit card is not worth the headache any longer.

-- Posted by midea on Wed, Oct 5, 2011, at 9:36 AM

Trouble2011,

Changing banks won't work. Someone is going to come from another bank and take your place at your bank, and you are going to go take another persons place at another bank. So, the bank hasn't really lost anything. They still have the customer. Nice idea though.

-- Posted by midea on Wed, Oct 5, 2011, at 9:38 AM

According to Kelly, the 21 cent cap is already 4 times what it costs the bank to run the card. Per Kelly: Congress recently put a limit on that of about 21 cents -- a figure that is four times higher than the actual cost to the banks to administrate each swipe of those cards.

So why do banks need to charge 44 cents? Is there any other reason other than greed. There is the right to earn a profit, but a 44 cent fee would seem no more than just out and out greed.

-- Posted by midea on Wed, Oct 5, 2011, at 10:01 AM

Okay, maybe I am assuming and trying to believe a "credible" source. So, let's get back to the source of my info - Kelly.

Kelly, where is it stated that the 21 cents is 4 times what it costs the bank to administer each swipe?

Also, I agree, the market should DICTATE prices, but, the banks are so interlinked with the government that they are a mish-mash of government and the public market.

I do beleive the bank makes money on debit swipes, more than enough to cover the cost of each swipe, and the banks also make money on other services. Each service a bank offers, they make money on that service - or should be, that is just good business sense.

Anyway, hope Kelly can get the info for us.

-- Posted by midea on Wed, Oct 5, 2011, at 10:12 AM

Banks make money on all of your deposits, checking,savings and every other service they provide. This fee will just help them pay larger bonuses to themselves next year.

Greed is King no matter where you are. Even in Mountain Home.

-- Posted by gmoney on Wed, Oct 5, 2011, at 10:29 AM

Yeah the banks need money after all we had to bail them out!

-- Posted by MsMarylin on Wed, Oct 5, 2011, at 10:38 AM

I do know this - the general public is afraid to spend. Business is afraid to spend. The total market is in a grid lock. For instance: There are homeowners (in good standing) who have not gone in and taken out a home loan at a cheaper interest rate and lower payment than what they pay now. Why? Fear? The interest rates on loans, in some cases, now are about 3.5%, people just have to go to the banks and do the paperwork required and qualify. (Yes, this is true, first hand knowledge). Just to drop the payment is a reason to do it. One could drop the payment and take the same amount of time to pay it off. Granted, this is not for everyone. But, people who would qualify, and can do it, apparently are not doing this or even trying. None of this makes any sense to me. The only reason I can think of that is causing people to not do things like this, is fear.

People and business it seems are frozen with fear, which is actually hurting the situation.

-- Posted by midea on Wed, Oct 5, 2011, at 10:42 AM

Hopefully Kelly can get that info today. Has got to be an interesting read.

-- Posted by midea on Wed, Oct 5, 2011, at 11:19 AM

Oh I remember when the "Illegals" got Bank of America Cards, but they would to big to bail out but our great Big Brother just did that and billed out BOA along with some other big ducks Like Citi group and the list goes on.

-- Posted by Eagle_eye on Wed, Oct 5, 2011, at 5:48 PM

Hommer, we are all well aware of your stance that there should be no regulations on business. Of course it should be both legal and moral for a business to make a profit no matter how they do it. Lack of regulation lead to the housing bubble. Let business make all the profit they want, which they did, and when their house of cards came crashing down, who did they turn to? Why the taxpayer of course. Let's get rid of all regulations for food safety and drug safety, after all it cost the companies money. Let's get rid of the E.P.A. and let the companies poison the environment. After all it cost's the companies money to not poison the environment. And if you don't think they would, you have a very faulty memory if you don't remember acid rain or all the super-fund sites, where companies poisoned the earth and water, and then walked away. After all, cleaning up after themselves cost money.

The long and short of it is, corporate America will rape and pillage at every chance, and people like you will always decry regulations that protect the environment, peoples safety, you name it. The almighty dollar rules! The people be darned. (That's not the word I wanted to use)

-- Posted by royincaldwell on Wed, Oct 5, 2011, at 6:30 PM

Not to mention the lack of environmental regulations and the lack worker safety regulations. Not to mention Social Security.

Corporate america has proven over and over, that it has no morals when it comes to profit. They will poison the environment and kill it's workers without a second thought.

-- Posted by royincaldwell on Wed, Oct 5, 2011, at 6:57 PM

Well, we sure can't give them free reign like they have overseas. We will have to re-write the tax code in such a way that it will be less expensive to make thing here that are bought here, than making them overseas and imported here. Call them what you will, Import tariffs, incentives, what ever. Since all they seem to worship is the bottom line, hit them where they will feel it and respect it. Keep the environmental laws and labor laws to protect us. Yes we need to do away with some stupid rules, but by their past performance, they can not be trusted to do the right thing and everyone knows it!

-- Posted by royincaldwell on Thu, Oct 6, 2011, at 6:34 AM

We do need to bring business back home to our country. They do need to make a profit. The US has so over-regulated and overtaxed that it is hard to make any profit in this country. People complain about big corporations, big profits, but without those, there are no jobs. There are no jobs other than service type jobs. I believe in a fair profit. Companies who basically pillage from their customer will eventually fall on their face and rightly should, and GOVERNMENT should let them lay and die off. The greed begins with our government, the more a corporation makes, the more the government wants of that, the more they are regulated (follow the money). Begin with government, cut the thieves, liars, and cheats.

-- Posted by midea on Thu, Oct 6, 2011, at 10:10 AM

Whew!

MtnHomer, I used to sarcastically ask, "why use 25 words when 2500 will do?" Now, I have to take back my comments...sometimes you just have to spell it out for the reader, and not assume the reader knows why he feels the way he does.

I respect you taking the time to annotate the facts to support your response to Roy.

-- Posted by junkyard dog on Thu, Oct 6, 2011, at 7:06 PM

Well Homer, a few links if you or anyone else is interested. I wont paraphrase or cherry pick

Jobs

http://news.yahoo.com/ge-capital-ceo-sym...

I think the man qualifies as a expert.

Acid Rain

http://www.epa.gov/acidrain/what/index.h...

http://www.epa.gov/acidrain/effects/inde...

http://environment.nationalgeographic.co...

Now let me tell everyone a story. I spent 35 years working in the electronics industry. Printed circuits and semi-conductors. Both very dirty businesses and businesses that employed thousands and thousands of people. To this day, there are still cleanups going on as the result of the actions of these businesses, mainly groundwater pollution. The pollution resulted from big companies that decided the the regulations were too burdensome and expensive to follow, so they cooked the logs, lied and illegally dump their waste into the groundwater. This happened in a great number of states. The guilty businesses closed up shop and moved offshore, leaving the cost of cleanup to the taxpayers. How generous of them. Some people and companies were charged and were fined, but the damage was done. Look at the countries where they relocated. They are environmental disasters. There was another plus to moving. No overtime or worker safety laws or regulations. No expensive workers compensation for the workers that were injured or poisoned. The net result, bigger profits. So I do know about stewardship of the land. Litter can be picked up, the mess they left may never be cleaned up. While I agree that there are some unneeded regulations, to trust big business to do the "right" thing is irresponsible in my opinion. You can say that all this is old history, and it is, but it is history that must never be forgotten for the sake of our future generations. If we don't care, then you can bet big business wont care. Which is more important, our futures, or PROFIT?

-- Posted by royincaldwell on Thu, Oct 6, 2011, at 8:23 PM

COME HOME.......The gold co near atlanta....the last i heard they WALKED AWAY.......so we know were the arsenic is going.

Burdensom regulations......that is so subjective it's not worth talking about.There is a way to determine what regulation need to be in place and those that dont.We could start with getting the lawyers out of it and get to the affected parties.However profits should not out weigh human safety,money is not the end all.

The fed is not the heart of EVERY problem in this country.Also science is not perfect but it should not be ignored for the sake of MONEY.It can make a mistake and so can we.

Renting may be cheaper but it does not have a return,you may as well burn your money,The only security and accumulation of wealth for some in this country is home ownership.It allows savings and shelter at the same time.

Both arguments have pros and cons point being WHAT IS BEST FOR US ALL. rIGHT NOW THE MIDDLE CLASS IS BEING DEVASTATED AND THE BLEEDING CONTINUES.....WALL ST IS CLEANING UP.....AND THEN WHAT?????????????????? IT'S ALL THE PRESIDENTS FAULT...........RIGHT !!!!!!!!!!!

-- Posted by lamont on Thu, Oct 6, 2011, at 9:44 PM

The link was to Mr. Neal, not Mr. Immelt. I have ragged on G.E. as well as others and you know it. I never said the new regulations sat well with me. In fact I said there were a lot of stupid regulations that needed to go. The banks made poor choices, lost a ton of money after making a ton of money, and now expects the ordinary consumer to pay for it. If you gamble and lose, and your not a bank, you suck it up and move on. If your a bank, you just raise fees on people that had no control over your conduct.

-- Posted by royincaldwell on Fri, Oct 7, 2011, at 5:32 AM

That email has been out there longer then 3 years and the original one didn't have Obamas name in it.

Here's what it had

"You're a Congressman for the U.S. Government", says Bud."

Just goes to show you how Republicans change words for their own agendas

-- Posted by MsMarylin on Fri, Oct 7, 2011, at 9:05 AM

I guess I didn't have enough coffee...lol! My comment was for Mikes blog on fraud...

-- Posted by MsMarylin on Fri, Oct 7, 2011, at 9:24 AM

Kelly,

Where is it stated or where did you get your information, that 21 cents is 4 times what it costs the bank to administer each swipe?

-- Posted by midea on Fri, Oct 7, 2011, at 3:46 PM

Midea,

There doesn't seem to be any hard consensus on what it costs. Here are a couple of links with estimates.

http://www.iwatchnews.org/2011/06/06/481...

http://www.iwatchnews.org/2011/05/03/445...

-- Posted by Amuzeme on Fri, Oct 7, 2011, at 4:05 PM

After reading both articles I would probably have said the same thing, about 12 cents or so.

-- Posted by midea on Sat, Oct 8, 2011, at 9:58 AM

Good grief I need more coffee! I meant to say that after reading the reports, I would have probably said it costs about 11-12 cents average, as per the report. So not sure how you came up with 21 cents and 4 times more.

Anyway, thanks for the data, was nice to be able to see the numbers.

-- Posted by midea on Sat, Oct 8, 2011, at 10:11 AM


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