Banks are pissed and not fun anymore
There is no question in my mind, banks are pissed at regulators and customers for throwing a wrench into their profit making machines, and they are taking it out on us. If you’ve seen the secret history of the credit card, you know that the banking and credit card industry engineered their profit machine by setting people up to fail with things like higher credit than they deserved, monthly payments that were far too low, racheting up interest rates for any (and often no) reason, and automatic overdraft protection that generates tons of overdraft fees. Now the government has tightened regulations through the Feds new rules and the Credit Card Reform Act of 2009 which outlaws many of these practices and they are further discussing the overdraft issue, and consumers are defaulting at record rates.
Banks are pissed as the era of easy money is quickly fading into history. I recently received a notice form Bank of America that my account was switching from a fixed rate of 9.9% fo a variable rate that is also currently 9.9%. Sounds the same but this is also a trick, as the prime rate the variable rate is based on is historically low at 3.25%, meaning that my rate will average much higher over the next decade. They are doing this to me, a good customer, with perfect credit, a perfect payment history, and I use my credit cards a lot. They claim they are doing this to all their accounts.
Perhaps it is time to start paying for things with cash again. Merchants will thank you, as it saves them 3%. For businesses like a grocery store, which has net margins of about 1%, this can make a HUGE difference.
Banks need to be taught a lesson, the time of easy money and abusing customers is gone. It is time they started behaving like the revered institutions they once were again.
Fees & charges, Legal & regulatory, Tips | admin July 12, 2009
