When I was growing up back in "the dark ages," people made consumer purchases in one of three ways: they paid cash, used a commercial credit card or wrote a check. (For you youngsters out there, a check is a piece of paper.) Around the time I first entered college, a new and novel product hit the scene: the ATM card.
Unlike today's debit cards, an ATM card could only be used at the ATM machine at YOUR bank. Within a few years, the banks created banking networks so that we consumers could use our ATM cards at any bank within the network. People continued to pay bills bills and make purchases predominantly with checks and commercial credit cards.
Of course, at some point, the banks introduced debit cards and that changed everything. Now anyone with a debit card could use it like a credit card so long as you didn't overdraw your account.
The banks really pushed their account holders to embrace the debit card. (It took me quite a long time to get with it. I still was writing checks, for the most part, until 2 or 3 years ago.) Some accounts started charging for checks used over a certain number per month. The checks themselves suddenly became a lot more expensive to purchase. All the while, the banks enticed us with low or no fees for debit card purchases.
It's easy to understand WHY banks pushed debit cards. It reduced their expenses considerably. Computers -- rather than workers -- handle most of the record keeping and less workers means more corporate profits.
But now, some leading banks (like Bank of America) have devised a new strategy: they will charge us for using the very debit cards they foisted upon us. Now that most consumers have and use debit cards everyday -- they have become indispensable -- it will be hard for many to "kick the habit" and so they will [grudgingly] accept the fee.
Makes ya wonder if this was the banks' real plan all along.
Unlike today's debit cards, an ATM card could only be used at the ATM machine at YOUR bank. Within a few years, the banks created banking networks so that we consumers could use our ATM cards at any bank within the network. People continued to pay bills bills and make purchases predominantly with checks and commercial credit cards.
Of course, at some point, the banks introduced debit cards and that changed everything. Now anyone with a debit card could use it like a credit card so long as you didn't overdraw your account.
The banks really pushed their account holders to embrace the debit card. (It took me quite a long time to get with it. I still was writing checks, for the most part, until 2 or 3 years ago.) Some accounts started charging for checks used over a certain number per month. The checks themselves suddenly became a lot more expensive to purchase. All the while, the banks enticed us with low or no fees for debit card purchases.
It's easy to understand WHY banks pushed debit cards. It reduced their expenses considerably. Computers -- rather than workers -- handle most of the record keeping and less workers means more corporate profits.
But now, some leading banks (like Bank of America) have devised a new strategy: they will charge us for using the very debit cards they foisted upon us. Now that most consumers have and use debit cards everyday -- they have become indispensable -- it will be hard for many to "kick the habit" and so they will [grudgingly] accept the fee.
Makes ya wonder if this was the banks' real plan all along.
I remember a time even before plastic. My father, who was loyal to Sunoco, would pay for gas using company-issued "SunChecks," which were like a checkbook issued by the oil company. It was kind of innovative at the time, and his loyalty to Sunoco was probably becasue of the ease of payment, which then was settled a the end of the month with a real check.
ReplyDeleteI also remember when you could get just five bucks from an ATM.
Of course, most ATMs not owned my own bank, a local bank, will charge a fee for withdrawal. And I aways thought the debit fee was passed on to the merchant for debit purchases although most business accept that now.
And many credit cards charge an annual fee...I had a card that I had pretty much stopped using, because I put everything on one to earn FF miles. I called to cancel the account, which was charging $30 a year...After being kicked up through a couple of management levels in the customer service department, at their suggestion, I was advised I could keep the card, because I was such a good customer with a huge credit limit and a good credit rating, and they would waive the fee.
Gives a whole new meaning to "paper or plastic?"
However, I don't pay my routine bills on line and we maintain an analog landline (in addition to our cellphones) just because it's cheaper but we know it cost the phone company more.
ReplyDeleteYou know, I don't give the banks that much credit for planning this ...I think they make it up as they go along. (A lot like the Netlix DVD/streaming debacle.) I don't think anyone thinks things all the way through before they implement them. That's the real problem. I don't see conspiracy so much as ineptitude.
If the banks had planned this all along, I doubt they would have waited until now to start charging fees. This is just another way they have decided to gain profits, to make up for what they lose elsewhere (kind of like when the government does finally introduce a tax break - say an income tax reduction - but they then raise taxes or introduce a new tax in another area, like property or sales tax). Business is a shell game, and it probably is actually a good thing that it is due to ineptitude, as the baroness says, rather than conspiracy. Then there is always hope that we can muddle out of these situations because of sloppy planning; tight conspiracies involving powerful people and organizations are usually more involved, planned, and therefore the results are harder to break free from. Of course, the other thing that saves us from deep conspiracy theory is the simple fact that human error creeps into the best laid plans, which leads us back to ineptitude.
ReplyDeleteIm really afraid of getting a credit or debit card. Not just because I may get into debt, but because of all the schemes banks can pull on you. Yet I keep getting the impression that its impossible to live in this modern world without credit or plastic. What should I do, any advice?
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