Why in the world are banks collecting fees for debit card transactions? Thereâ€™s no reason for it.
Banks save money by consumers using debit cards. They donâ€™t have to process and clear checks and the transactions are safer.
Nevertheless, banks collected more than $20 billion last year in debit card interchange fees. As mentioned, the banks do nothing to earn these fees. On the other hand, stores, and by extension consumers, end up paying more because of the bank fees. Havenâ€™t we all seen signs at some gas stations where paying in cash is a few cents per gallon cheaper? The whole shebang is an unjustified transfer of wealth from all of us to the banks.
Hereâ€™s the answer to our original question, Why in the world are banks collecting fees for debit card transactions? We want our readers to clearly understand the answer:
Banks collect unjustified fees for debit card transactions because they are headed by greedy people who, if allowed to do so, will nickel and dime you and I for every ill-gotten cent they can scarf. Ebenezer Scrooge has nothing on bank executives when it comes to callous, skinflint behavior.
Thatâ€™s the bad news. Hereâ€™s the good news: The Federal Reserve can put a stop to banks gouging debit card fees out of our pockets. The Fed should have done this a long time ago but thatâ€™s past history â€” itâ€™s time to stop it now! We urge readers to call their U.S. representatives and senators and tell them to insist that the Federal Reserve ends banksâ€™ debit card fees.
An interesting subplot to the bank debit card chicanery is that it never should have happened in the first place. A century ago, banks tried to take a surcharge from those â€œnewfangledâ€ checks that were written on other banks. The Fed eventually stopped that bad practice. A generation ago, when debit cards started becoming popular, the same rules should have applied, but the 1980s Federal Reserve didnâ€™t take action, and interchange exchange charges were resurrected by eager-to-gouge banks.
This century, there have been way too many abuses by our financial practices industry to allow this particular legalized banditry to continue. With the recession, Americans have learned a tough but important lesson â€” financial firms are not concerned about our long-term security. They just want to make a quick, unhealthy fortune, even if later throws the world into financial upheaval or harms our bank and savings accounts. We wonâ€™t allow our regulators to tolerate that anymore.