That's for allowing us to spend the cash that we've already deposited, and that they are lending to someone else.
They are paying us interest on that money at maybe $2.00 / $1,000 on deposit per year.
They are lending that money to their credit card customers at rates that start around $120.00 /$1,000 per year.
A bank can make a profit at roughly a 2.5% spread between what it costs them and what they can lend it for.
So they should be able to make about $88.00 per year per $1,000. on what we have on deposit.
And now they want to add another $60.00 per year to that - a total of $148. per year.
Of course they do have the need to generate income.
They are trying to offset what will easily be more than $30,000,000,000.00 in losses due to the mortgage mess.
But, that was becasuse of bad business decisions on their part.
That should come out of their shareholders pockets, not mine.
And of course their shareholders, through their board, should fire their managers. [They largely have.]
Just say NO !
For thr record, while some banks have said that they also will begin charging, both Citi and Ally have specifically announced that they would not.
You know where my account will be.