a predator/prey dynamic
Banks are in business -- and they must turn a profit to survive. With rock-bottom interest rates and a savvier customer base card-hopping to get the best deal, they're relying on fees to pay to keep the lights on.
Boy, are we paying the price, though. In 1995, customers paid on average $20 when they messed up. Fee revenues in the industry were just $8.3 billion. Last year the industry reaped an all-time high of $24 billion in late fees, over-limit fees, activation fees, and annual fees. Today customers pay 134% more for their foibles (up to $45) than in 1994. Income from penalty fees was a whopping 33% of profits last year.
Dayana Yochim/The Motley Fool Jun.29.04
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link rebecca's pocket
