Wall Street is one tough taskmaster.
It is being characterized as "disappointed" in the earnings reported today by Wells Fargo bank and, as a result, the Dow industrials are dropping.
What did Wells Fargo do to warrant such scorn? It reported a $4.1 billion profit in the third quarter, a 21-percent increase over a year ago.
But while its profit increased, the amount of revenue the bank generates did not.
Still, more people are putting money in the bank than taking it out -- deposits are up 8 percent, and the total amount of "bad" loans dropped.
How can Wells Fargo increase its revenue? The company has dropped all of its reward programs for credit cards and is "testing" a monthly fee in some markets, mostly in the south.
What's good for banks and Wall Street isn't always so hot for customers.
As a WF customer, it is news to me that they are dropping their reward points for their credit card. Looking at cashing mine in right now...
A lot of people have more or less quit carrying cash, and instead rely on the debit cards. My wife and I keep the credit cards in the safe for emergencies, but we do use our Wells Fargo Visa/Debit card for most things. She tells me extra fees are coming on that as well. She has also heard that some restaurants are deducting from employees tips when the tip is on a credit card to cover the new bank fees. The little guy gets hit again.
We have pretty much decided that if Wells tries to hang a fee on our plastic, we will give it back to them and simply go back to cash. It will be somewhat less convenient at the gas pump, but I'll do it just to annoy Wells Fargo.
I'm with John. I've moved most purchases from credit to debit and I'm moving more to cash all the time. I've grown tired of the greed. If they start charging to have a card in the first place, I would absolutely consider giving the card back and doing all my transactions at the teller window, where it actually costs them more money than an ATM transaction.
//She tells me extra fees are coming on that as well.
//She has also heard that some restaurants are deducting from employees tips when the tip is on a credit card to cover the new bank fees.
Is your wife reading NewsCut?
I don't quite understand why we expect to have the wonderfully convenient service of debit cards at no cost.Why should banks let anyone use their services for free? Because it's costly to us? Then do like John and Alison and stop using the service.
It's not "greed," it's business. I highly doubt anyone complaining about bank fees would consent to giving away their services for free.
It's called bait and switch in some circles. For years the banks encouraged people to use check cards and ATMs. Why? Because it cost the bank less to handle transactions that way than to process paper checks and have live tellers doing simple transactions like cashing checks or taking deposits. Now that everyone has moved in that direction (buyers and sellers) they start raising fees because they know people hate change.
For those of you who want to stick it to the bank make sure you go inside to the teller and have them cash a paper check for you.
Kevin, how old are you? When the banks were trying to sell a skeptical customer base on debit cards their main point was “huge savings”. Supposedly, processing checks and teller transactions was so expensive debit cards would more than pay for themselves.
Kevin, banks have the use of our money. That should, under normal circumstances, be their compensation. We shouldn't have to pay a fee to have our money returned to us.
This post illustrates a problem that I'm not hearing articulated by the OWS movement. There's nothing wrong with "corporations" per se. The problem is when corporations are driven to act largely based on how their actions will benefit shareholders. Not customers, not their employees, not society, and maybe not even themselves in the long term. Why can't making a handsome profit be enough?