Ask HN: Why are banks charging so many fees for accounts and cards? • Hacker News Board

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

#11

Post by wwtl12 » Sat, Jan 25, 2025, 7:36 PM UTC

They do make significant profits from them, especially from poorer people who incur them. They're also a great pretense to charge even more penalty fees, trapping people in a cycle of debt that is, conveniently, very profitable.

This is the same board where people will tell you to charge $10,000 a week for cloud consulting because it's "value-based pricing", and to steadily increase the per-user costs for your dime-a-dozen CRUD web app "because people will pay it". Amazing.

Banks do it because they can, buddy. It's wealth extraction, and if you aren't the one doing the extracting, you're the one being extracted.

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

#12

Post by wwtl12 » Sat, Jan 25, 2025, 7:37 PM UTC

SoftTalker wrote: post #9

Vaslo wrote: post #6

Nobody with good credit ratings is paying these fees. Exception maybe being those folks who want those fancy AMEX Black Card or whatever those cards are with concierges, etc.

Yes it's for people who have not demonstrated that they can use credit responsibly, not overdraft their accounts, etc.

Yeah, like single moms and people who experience unexpected deaths or job losses. How irresponsible! Maybe if they were rich app developers like Hacker News, they wouldn't have to be punished so much.

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

#13

Post by crackercrews » Sat, Jan 25, 2025, 7:43 PM UTC

pestatije wrote: post #8

Most banks dont charge for standard non-business accounts, neither for debit cards...where are you seeing these fees/charges?

I've seen these fees in personal accounts. They're usually waived if you maintain a certain minimum balance. Sometimes it's a few thousand dollars, but if you want things like free checks or other "perks" they can be much more. And of course they don't pay meaningful interest on your deposits. They're basically charging you the fee in the form of lost interest.

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

#14

Post by wwtl12 » Sat, Jan 25, 2025, 7:46 PM UTC

slater wrote: post #2

Because they can.

I wish I still believed that massive companies charged for things because they need to, and not simply because they can.

It reminds me of freezing your credit (you know, the thing that makes it a lot harder to get your life ruined with identity theft (in the US)). This used to cost about $10, each time, and I believe you had to send a letter with a check to each credit bureau.

Now? It's free, and you can do it on-demand online (although they all try to upcharge you into buying their stupid credit score nonsense every single time, which should be illegal). It's curious how this used to cost money, and then a lot of scandals happened, and either laws were passed or threatened to be passed, and now something pro-consumer that should have always been free... is free. And Experian, Equifax, and TransUnion are still making craptons of money.

The astute reader might ask why they ever charged for this in the first place. It couldn't be that they needed to, because they aren't now, and the universe hasn't imploded. So the only explanation is that they did it because they could, because it locked up something people needed to do behind a paywall, and was profitable.

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

#15

Post by nine_k » Sat, Jan 25, 2025, 7:47 PM UTC

A small income is better than no income at all, so why not charge $10/year if you can, and the customer won't mind?

I also suppose that charging a small amount regularly is a garbage collection mechanism. If you stopped paying attention to your empty account, it will run into negative, and eventually be closed due to that.

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

#16

Post by repsilat » Sat, Jan 25, 2025, 7:49 PM UTC

Vaslo wrote: post #6

Nobody with good credit ratings is paying these fees. Exception maybe being those folks who want those fancy AMEX Black Card or whatever those cards are with concierges, etc.

I have great credit and my bank charges me $3 every month to pay my rent. (They will send a cheque in the mail for free, but it wasn't reliable for me so I stopped doing that.) Third world stuff.

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

#17

Post by Ekaros » Sat, Jan 25, 2025, 7:49 PM UTC

Because they can and are not losing significant number of customers to price competition. Same works on most things. And if they cannot add fees, they will add ads. Extract as much money as possible and when they finally start losing people step it back and give discounts for limited period.

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

#18

Post by ctkhn » Sat, Jan 25, 2025, 7:55 PM UTC

wwtl12 wrote: post #12

SoftTalker wrote: post #9

Earlier quoted context omitted.

Yes it's for people who have not demonstrated that they can use credit responsibly, not overdraft their accounts, etc.

Yeah, like single moms and people who experience unexpected deaths or job losses. How irresponsible! Maybe if they were rich app developers like Hacker News, they wouldn't have to be punished so much.

Respect to you man. Not a lot of people care or have a lot of compassion for people that deserve it

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

#19

Post by philipwhiuk » Sat, Jan 25, 2025, 8:00 PM UTC

toomuchtodo wrote: post #4

As a financial services provider, you can make money in a couple of ways: net interest [1], loan interest (spread between your deposit interest and interest rates you price for credit products), fees, and interchange (skim off debit and credit card transactions). Which matrix of fees you elect to implement is a function of your customer persona(s), what they value, and sensitivity to those income levers. How do you p…

> How do you pay to operate your business without income?

Easy - VC funding :P

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

#20

Post by philipwhiuk » Sat, Jan 25, 2025, 8:01 PM UTC

repsilat wrote: post #16

Vaslo wrote: post #6

Nobody with good credit ratings is paying these fees. Exception maybe being those folks who want those fancy AMEX Black Card or whatever those cards are with concierges, etc.

I have great credit and my bank charges me $3 every month to pay my rent. (They will send a cheque in the mail for free, but it wasn't reliable for me so I stopped doing that.) Third world stuff.

Wat