Banks increase their profits by hiking account fees
Bank of America, which is one of the largest banks in the country, was the first one to levy monthly charges of $5 on their checking accounts last fall. However, this move did not go down well with the public who raised a hue and cry. The bank had to retreat and eliminate these charges. But, not the one to concede easily, this bank continues to levy these charges on accounts in certain states across the country.
Another bank to follow in the footsteps of the Bank of America is Wells Fargo & Co. This bank has implemented monthly fees of $7 on checking accounts in certain states across the country. However, these fees are applicable only to customers who do not carry out a lot of financial transactions on their accounts on a monthly basis. Customers who maintain a high monthly balance and carry out most business transactions are eliminated from these charges. JP Morgan Chase, another financial major in the country, is also taking measures to cut costs to increase profits. The bank is actively installing advanced ATMs and digital tablets to replace tellers. This move will also save billions of papers which in turn benefits the environment. These three banks put together account for up to one third of the market share in the country and every move they take such as increasing the fees, marketing aggressively and cutting costs is sure to have an impact on the other banks as well.
Customers entering banks in the future will most likely be diverted towards machines for assistance. The scenario at banks is likely to resemble the one at airport counters. Customers can meet their loan officers over the internet through video conferencing. And in a few years, it is not only the working class, but even the business and priority customers who will have to be wary about the increasing banking charges.
Though the banks continue to increase the charges, this move is not being welcomed by the public. Laurie Wittges, a home maker from California, is one of the many consumers who are not able to meet the minimum balance stipulated by banks to avoid paying monthly charges.