In this day and age, bank overdraft fees are almost as common as any other fee one can think of. That is not a positive development by any means, as it costs consumers a lot of money in the process. Just last year, the three largest US banks earned US$6.4bn from ATM and overdraft fees. All of this goes to show solutions such as bitcoin are direly needed.
Banks Get Rich On The Back of Consumers
It is not the first time reports like these surface. Banks have been enriching themselves on the backs of consumers for several decades now. The “invention” of ATM withdrawal and overdraft fees have generated a ton of passive revenue for financial institutions all over the world. America’s three biggest banks netted US$6.4bn in fees just last year from this dubious practices. Forcing consumers to pay a fee so they can withdraw their own money is taking things one step too far, to say the least.
To put this number into simpler terms, every adult American paid US$25 in fees last year to access their own funds. For some reason, very few people see a problem with this scenario, even though it goes to show there is a growing need for better solutions. Whether or not bitcoin can provide that solution, remains to be seen, though.
For families who struggle to make ends meet, these fees are putting an unnecessary strain on their already tight budgets. Using an out-of-network ATM is subject to an average fee of US$4.57, marking a decade of steady increases. Limiting these charges has been quite a challenge, as banks are more than happy to let them increase as time progresses. Going to an ATM and paying fees every single time is not something that should be remotely possible in 2017.
Overdraft and maintenance fees, on the other hand, are an even bigger issue right now. Every time someone’s bank balance drops below US$0 and they make another payment, the bank charges an overdraft fee. In most cases, that means US$35 in costs associated with this temporary “credit loan”. It is possible for consumers to have multiple overdraft fees on their statement within the same month, which seems rather ludicrous.
Interestingly enough, nearly 75% of all overdraft fees in the US are paid by 8% of all customers. With an overdraft virtually every month of the years, costs are adding up rather quickly. It is evident this system is unfair and requires some serious changes sooner rather than later. For now, the banks will continue to pocked these fees without giving it a second thought, though.
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