Sunday, October 9, 2011

Debit Card Fees -- Good or Bad?

Take a quick look at this cartoon, then come back . . . I'll wait . . .

So what do you think? Is this a good thing or a bad thing or what? If you're a banker, you're looking to maximize your profits -- capitalism, remember? If you're a business, you're thinking it's great to have the bank pass on these fees to the consumer, so you don't have to hide them in the YOUR prices. If you're a consumer, you're thinking, "HEY, what the heck!"

If you use debit cards -- I don't -- you're thinking that this is pretty raw. Maybe you should switch to your credit card for all purchases and pay it off at the end of the month. In a way, this may be what the banks are thinking. Use your credit card, charge just a bit too much to pay off at the end of the month, more profits for the banks -- this time in interest on your credit balance. Win - ah, not so win.

Of course, this might be a good thing, if the theories of the open markets holds. You'll move your accounts to another bank with lower or no fees . . . but wait a minute. It's a hassle to move accounts, especially if you have automatic deposits or bill payments. Man, not as easy as you might think to make this market thing work -- at least for the individual.