Thursday, October 22, 2009
Going Straight to the Bank with Profits from Credit Cards
By Jorden Meltz
As banks begin to release their earnings for the third quarter, many are continuing to realize the effects of the recession with under-performance in their consumer credit departments. So in reaction, many have decided that in order to raise profits they have to raise bank fees, versus the conventional thinking that smart investments would help them now and would have helped to prevent this problem in the first place. It is been reported that Bank of America is expected to charge fees of between 30-99 dollars, even to customers who pay their bills on time. This comes as no surprise, as Bank of America recently announced a one billion dollar loss for the third quarter. It clearly is no wonder why people have begun to lose trust in the financial industry, as clearly many consumers are now paying the price for making smarter financial decisions. It is also reported that Citibank will begin to charge consumers fees if they do not charge at least $2400 to their credit each year. With the pressure of new legislation weighing heavily upon many banks that already struggling, they are continually trying to find ways to get more money out of consumers. It is absurd to think that some consumers are actually being somewhat punished for making smarter financial decisions versus rewarded and thus I think it is safe to say regulation is needed sooner than later.