Banks- or- I wish Adam Smith’s invisible hand would stop touching me there.

Adam Smith

Let’s talk about banks. I remember, back in ancient times when I was in school, being taught that banks pay you interest to keep your money and use your money to make loans and investments. From the loans and investments they make their money. In other words, they pay you to borrow your money, and you pay them to borrow the money that someone else has loaned them. Simple right, but something has happened. I can’t understand why the interest you receive for any kind of deposit doesn’t AT LEAST match the inflation rate. The experts always say Americans don’t save enough but why should we, if you save in a typical saving account you are losing money. If inflation’s 3.5 to 4% and your savings are getting 1.5 to 2%, less fees for EVERYTHING, you are losing a nice little chunk of change. Meanwhile, your full SERVICE bank is charging probably 9 to 15% for non-home loans while charging you for everything.

Not only are they charging for everything, but they are finding ways to develop new profit centers. Take debit cards for instance. When these things started, they were perfect for new young adults, use them like a credit card but when you were out of money they stopped working. No more! The Banks fixed them so they will continue to charge, just like a credit card but with a fee for EACH PURCHASE. Oh, and if a purchase includes a security deposit, like rentals do with credit cards, and the seller doesn’t tell you, like they do with credit cards because it automatically clears before it matters, the money comes out of your account immediately. So if you rent some ski equipment and they put a fee on your care equal to the value of the equipment, then you return the equipment and go have dinner, that deposit will probably still be hanging around, maybe for a couple of days. Now each purchase you make gets wacked with an overdraft fee. You buy some Chapstick, that’s a $35 purchase. I don’t know what the reasoning was behind the change but it probably was something like, save the customer the embarrassment of being refused. Hell, if it’s gonna cost me $35, embarrass me. Sure if it’s a choice of getting arrested for a bad check or the fee I’ll take the fee, but these card systems are more sophisticated than that!

I think that the reason they do it this way is because they can!