One of the fundamental charges banks have passed onto consumers is the cost to store their money. A time did exist when this could be considered an acceptable charge, but with rates increasing on loans — banks’ real bread and butter — this is a relic of the past. You shouldn’t be spending money when you aren’t spending money. Here are four reasons why banks charge no overdraft fees for accounts.
Banking Has Changed
- How many of us balance our accounts with our check books? I can think of two people in my life who do and they are both grandparents. Online banking has changed how we bank. Instantaneously you can look at a record of your expenses and move money throughout your accounts. Monthly set up costs, like checkbook balancing, are a thing of the past. With increased options and new banks popping up, this cost will begin to diminish.
Millenials Dislike Traditional Banking Powerhouses
- Progress will only go as far as we demand it to go. With the next generation of tech savvy individuals gaining buying power, banks that offer low or no monthly costs will become the preference of an up-and-coming generation. A recent survey by Viacom found that four of the ten least liked companies of Millennials were banks. This traditional style of banking is sure to change as the increasing population of those with money refuse to be customers.
Targets Those with the Least Buying Power
- As much fun as it is to daydream about the past, the era of burying your money or stuffing it in a mattress has passed. With the vital role credit plays in our economy, it is nearly impossible to be an individual who deals in cash only purchasing. Eventually, you’ll need to set up an account. What does this have to do with people with limited buying power? It illustrates that every person, no matter their financial situation, are forced to be part of a financial institution. The field isn’t equal so that $5 monthly fee for not keeping your account at the required minimum might not mean much to you, but for someone on a fixed income, that will add up. If a large majority of your monthly income is used on bills, it is often very difficult to keep the required minimum in your account.
It’s An Absurd Practice
- The idea of letting someone have an account and then charging them for not having enough money in their account is pretty absurd when you think about it. This is an outdated practice that forces people to pay for something they really should have for free. This is especially true considering how many accounts the average family has (nine), and all the services an average family will utilize at a bank. The minimal service they provide should no longer be considered a premium.