Fees You Can See

Oct 6 2011 @ 10:15am

Last week Bank Of America announced that it will be charging debit card users a monthly fee because other profit making schemes have been cut off due to new financial regulations. Kevin Drum prefers this new fee to previous hidden fees:

[T]he new fees are annoying. But that’s a feature, not a bug, because now they’re right up front in black and white, which means that consumers will see them and can be properly outraged (or not) by them. This in turn means that the free market has a chance to actually work: consumers will abandon Bank of America if their fees are too high and force them to charge less. Likewise, other banks will compete openly on the size of their fees. In the end, this competition will force fees down to the lowest possible profitable level, which is exactly what competition is supposed to.

John Cassidy adds his two cents. Austin Frakt wonders what would happen if the health care industry followed suit:

A $5/month debit card use fee is annoying. Suddenly learning that your income is lower than it would otherwise be by $10,000 because of your “employer-paid” premium is not annoying. It is enraging.