Banks Are Changing How They Deal with Cash Now
Banks make changes
Banks are being careful with cash now more than ever. The financial industry is regrouping after the recession, and consumers can expect to see more changes. Plans and services that once were common will be scaled back and replaced. It’s an interesting time to watch the market and how it is going to continue managing now that the economy is leveling itself off. Bank managers are entering into the 2010 market with a new mindset. They want to mitigate their own risk, but still create attractive programs to bring in customers.
Free checking accounts
One of the biggest changes expected to happen in 2010 is financial institutions eliminating the “free checking account.” Last year banks used the tool to bring in customers. They waived any start-up fees, had no minimum balances and didn’t charge a monthly fee. Those days are expected to soon be long gone. Now, financial institutions are rethinking their checking account programs. With risk still high in the market, banks want ways to recoup losses and protect their money. That means that monthly fees will make a return to the market along with minimum account balances.
Though free checking is going the way of the dinosaurs, the good news is that rewards programs will come back to replace them. As a replacement for paying for services, banks will institute more rewards to attract customers. There used to be rewards attached to making debit card purchases, but now banks will offer rewards for more than just that. For example, Capital One bank introduced a new reward program that links to its credit card rewards program so customers can earn points faster.
The cash incentive
A lot of banks understand that the bottom line for customers is cash. Anyone who has done a search of banking products has likely seen the number of banks giving a free $50, $75 and even $100 to customers opening an account and keeping it open for a specified number of months. In 2010 these incentives are expected to rise considerably. Banks understand the importance of cash now more than ever and are going to use it. For example, Mintel began offering a $200 deposit to customers who open an account and use their debit card three times in the first 30-days. It’s a great way to earn more money. Consumers should read and understand the fine print, but many programs are straightforward.
Banks are pushing their debit cards and doing so through direct mail marketing plans. The reason is because banks have elevated their debit card fees. They are trying to maximize their own profits and the debit card’s flexibility and convenience is a good way to do it. Customers everywhere want a debit card because it protects them against overdraft fees and avoids interest fees a credit card would incur. Due to its popularity, banks are looking for ways to capitalize on its usefulness.
The new market
Cash now is a commodity that everyone is protecting and that includes banking institutions. They are changing the rules for 2010 and that means some advantages and disadvantages for customers. Overall the changes are evening out though and consumers can still find some beneficial bonuses in the banking market.