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

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

#31

Post by doubled112 »

pestatije wrote: post #8

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

Most big banks in Canada charge for standard non-business bank accounts.

This one is TD but the others all charge the same. Why compete when you can collude?

    TD Unlimited Chequing Account
    
    Unlimited transactions for your peace of mind
    
    Annual fee rebate for the first year on select TD credit cards (up to $139)
    
    No TD ATM fee at any ATM in Canada
    
    Free Interac e-Transfer® transactions
    
    Monthly account fee of $16.95 or $0 if you maintain a daily balance of $4,000 or more
https://www.td.com/ca/en/personal-banking/products/bank-acco...

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

#32

Post by SpicyLemonZest »

wwtl12 wrote: post #14
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-de…

The false dichotomy between "need to" and "because they can" is at the root of a lot of sloppy economic thinking. It's true that businesses aren't trying to charge the bare minimum they need to survive, and that this sometimes lets them absorb the cost of providing service X for free with no hit to consumer welfare. (This can happen for both regulatory and non-regulatory reasons - furniture stores, for example, will often give you quite a bit of free employee time in hopes of catching a sale.)

It's not true that business costs are entirely fictional and consumer willingness to get hosed is the only input to their pricing models.

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

#33

Post by citizenpaul »

I prefer to pay a decent fee so they make money for the service. As tech oligarchs have taught us if you are not the customer you are the product. I'd prefer to be a customer to my bank.

Banks are an odd business. You are basically guaranteed some income but the margins are slim and lots of regulations. Despite all the bad behavior they are probably one of if not the closest watched businesses by gov regulators.

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

#34

Post by nokun7 »

I’ve never experienced my bank imposing such fees or restrictions, nor can I recall any bank I’ve used over the past two decades or so doing such. However, some banks adopt these practices, and I question why customers remain loyal when there are abundant alternatives in today’s competitive financial market.

One possible explanation is inertia: many people stick with their bank because it’s familiar. It may be the bank their parents used, or they’ve been loyal customers for years and assume they’re getting the best deal. Unfortunately, this loyalty often overlooks better opportunities elsewhere. Interestingly, credit unions—despite promoting themselves as customer-centric and fee-conscious—can also impose excessive fees, challenging their claimed superiority.

Credit unions are notorious for limited official working hours, which can be frustrating when urgent banking needs arise. Accessibility in banking has become a priority, especially for those who need customer service outside traditional “banker’s hours.” The idea of physically visiting a branch, often during inconvenient weekday hours, feels increasingly outdated in today’s digital-first world.

For me, a bank needs to be accessible on my schedule—not the other way around. The ability to resolve issues or access services anytime is essential, and plenty of financial institutions cater to these preferences without restrictive fees or antiquated processes. Customers should embrace this freedom of choice and find banks that value their time and priorities, not the other way around.

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

#35

Post by SoftTalker »

citizenpaul wrote: post #33

I prefer to pay a decent fee so they make money for the service. As tech oligarchs have taught us if you are not the customer you are the product. I'd prefer to be a customer to my bank. Banks are an odd business. You are basically guaranteed some income but the margins are slim and lots of regulations. Despite all the bad behavior they are probably one of if not the closest watched businesses by gov regulators.

The banks are holding your money and lending it out at a profit (fractional reserve banking). You should not feel obliged to pay fees on top of this.

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

#37

Post by jkaplowitz »

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.

And many of the best fancy cards provide enough value in the various benefits they offer to outweigh the fee for many of those customers. This is often true not only in terms of luxury experiences like lounge access, but even in terms of cold hard financial value. Examples include a certain amount of annual statement credit against certain types of transactions, points that can be directly or indirectly redeemed for lots of types of purchases, and so on.

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

#38

Post by smitelli »

crackercrews wrote: post #13
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.

Just a PSA for anyone unaware, you can get checks printed anywhere and using a huge variety of designs. It is not mandatory to order them from the bank where the account is held.

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

#40

Post by crackercrews »

drdec wrote: post #23
crackercrews wrote: post #13

Earlier quoted context omitted.

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.

Why would you expect checks to be free? The people who print checks need to eat too. I'm curious what else is under your "perks" umbrella. If you want a checking account with no minimums try Ally. EFT payments are also free. You will have to pay for checks however.

Because a small number of checks have been free for many decades. They cost almost nothing to print. But banks now charge $20 for a small box. Add another $10 for shipping.

I don't use checks often but have to buy a box in order to have >0.

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