Unsightly charges and fees are those costs banks charge their customers that are hideous in nature. This paper explores the possibility of these lending institutions changing from such a practice and disbanding such a culture. The charges are normally not well understood and known to the customers. Quite often, bank account holders cannot be able to tell exactly how much money they have in their accounts. This is because, in most cases, the balance somehow falls below the expected. This is attributed to the charges that are imposed on their accounts.
Body
The relevant thesis statement in this case is that the unsightly bank fees and charges will not go away. This is because for quite long periods, banks have capitalized on such fees and charges as their sources of revenue. These charges present a huge source of income to the banks. Hence, it would be impractical for such fees and charges to be dropped. It is therefore an advantage to these lending institutions to levy such charges since they provide them with substantial amounts of income. These incomes can be used to further expansion programs for the banks or used to give loans at some interest rates. This is the core business of banks. They raise money from depositors and other sources like the charges, lend it at an interest, and earn income from the interest charged. The charges are therefore an important source of income to banks.
It is appropriate that banks charge for the services rendered. For example, charges for use of ATMs can be used to maintain the facilities. These are machines, which regularly require repairs and maintenance. The costs of acquiring them and facilitating their functioning can only be passed or charged upon the users of the facility. It is hence relevant to have the charges levied on the customers. An appropriate solution would be to lower the costs to reasonable amounts. Some costs can as well be scrapped. Charges like those for denial of service need to be dropped. This is because no actual withdrawal of money has been done. It is therefore necessary to reduce the costs to levels that are normal based on the service rendered.
The solution is therefore to maintain reasonable charges. This would save customers extra expenses, which are not reasonable. For example, charges to check the account balance and no withdrawal on cash are made. The double charging also in case of use of another bank’s ATM should be scrapped. The banks need to agree to share such services so that they do not incur many expenses in replicating facilities. They should for example install one ATM facility that can be used by any customer bank without an extra charge. This would save customers excess charges.
By lowering the charges to lower and appropriate levels, the banks would portray themselves as institutions that engage in genuine business without any hidden charges. Customers would thereby be free to seek their services given that no misunderstanding that exists between them. This creates favorable conditions for the carrying out of business and hence improved welfare for both parties.
Customers would currently shy away from utilizing bank facilities due to the fear of hidden costs and charges. Where they are reduced to minimum and reasonable levels, the same customers would be free to engage the banks again. This means that the banks would earn more from other facilities that they offer to customers. With more customers, they are able to sell more of their products and hence increased incomes to the banks.
Conclusion
Banks engage in the business of lending money and offering other financial services at a cost. There are however some costs that are hideous. Costs like when being charged for checking the account balance, costs for denial of service, clearly seem to be unfair since no money has been withdrawn. Such charges and fees serve to discourage many individuals from engaging banks in many of their activities for fear of such charges. It is therefore important that banks review these practices so that they come up with reasonable practices that would attract more customers to rather than discourage. Where such terms are present, banks would be in harmony with many people and hence more customers leading to increased income.