Ask HN: Why are banks charging so many fees for accounts and cards?

Post by BenjiWiebe » Mon, Jan 27, 2025, 3:58 PM UTC

ACow_Adonis wrote: post #68

BenjiWiebe wrote: post #62

Earlier quoted context omitted.

Well, somehow not every bank/credit card needs to charge fees to make money. I have two bank accounts and 5 credit cards - no fees. And I'm not a rich SV programmer either. If I was, I'd probably get one of those fancy cards that does have fees.

Yes, this is product differentiation, features, demand elasticity, network/ecosystem lock-in, loyalty tax etc. Just as software and internet also has a mixture of free to use, once off, subscription, usage metering and fixed cost revenue, so too does banking and credit services vary their fee revenue structure and sources for its various financial services and products. It's very hard to make universal statements to…

> if you aren't paying fees, the commercial entity must be aiming to make revenue off of you being a customer in some way.

Yes, credit cards make money from merchant fees and banks make money from lending your money out.

Post by troupe » Sun, Feb 02, 2025, 5:32 PM UTC

Lopsii wrote: post #66

troupe wrote: post #46

Earlier quoted context omitted.

When it comes to banks, there is also a tier where fees are waived for high value customers. For example, checking, atm, wires, are free if you have $50k or more in your checking account.

this is true. makes you question why they do it for them and not for everybody

There is a certain amount of overhead in servicing an account whether it has $5 in it or $500,000 in it. A $5 account doesn't give the bank much to loan while a $500,000 gives the bank lots of money to loan out. So the bank would rather have 100 $500k accounts than 100 $5 accounts. The fees help make the bank willing to maintain the $5 accounts.

Re: Ask HN: Why are banks charging so many fees for accounts and cards?

Re: Ask HN: Why are banks charging so many fees for accounts and cards?