New Ways To Make Money This Year

At the end of the 3rd quarter in 2009, consumer revolving debt was $893 billion dollars, compared to the 3rd quarter of 2010 of $806 billion dollars, suggesting that consumers paid DOWN $87 billion dollars of debt in a 1 year period! What you don’t hear, is that banks CHARGED OFF approximately $80 billion dollars in consumer debt last year. The truth is, that consumer debt dropped ONLY about $7 billion dollars in 2010, due to consumers paying DOWN their OWN debts.

As you can imagine, credit card companies are looking for new ways to make money this year. With high consumer charge offs, combined with new federal rules and regulations, credit card companies and banks now stand to lose a significant portion of their previously profitable revenue stream.

Financial institutions are expected to introduce more NEW fees in 2011. As an example - credit card account holders have been hit with inactivity fees for NOT running up their balances, and foreign-exchange fees when using their credit card to make non-US dollar purchases. Checking accounts are getting hit with new monthly maintenance fees, and minimum requirements are becoming more difficult to meet. J.P. Morgan Chase bank, which in 2008 acquired Washington Mutual and all of their “free” checking accounts, will be adding fees BACK to these previously “free” checking accounts, starting in 2011. Bank executives, however, point out that fees can be waived by meeting certain requirements, such as direct depositing at least $500 dollars or more into a customer’s account each month. Another checking account offered by Commerce Bank says that account holders can eliminate fees on their account if they avoid any paper-based transactions – on a checking account that uses PAPER CHECKS - really? (Rhetorical question)

Increased fees for using ATM machines are also being considered, as well as fees if you DON’T use an ATM. There may be fees if you forgo the online banking at the institution you bank with, and opt to see a “real” person. In addition, many banks are strongly considering adding annual fees to debit cards, limiting the NUMBER of transactions a debit card holder can make each month, and limiting the SIZE of any purchase a customer could make with a debit card. Strange as all this sounds, it’s true!

Ok, so you may be asking yourself, “Matt, what does this all mean to me?” Now that we’ve “checked” the facts, let’s “balance” this news using our Checks and Balances process to determine what actio
YOU should take TODAY.