3 ms·

How in the hell is it legal to charge someone a fee for having a balance below $X?

hackerlight 4y ago
They would have "agreed" to it in the fine print of a 20 page ToS that they didn't have the time or legal skills to read. Then crony capitalist corruption makes it so that lawmakers don't outlaw it.
zdragnar 4y ago
Different types of accounts offer different types of incentives. Your standard free checking account won't have a minimum balance, but also isn't going to be earning any interest worth mentioning. On the other hand, there are account types with higher interest earnings rates or other perks which require that you maintain a minimum balance. The minimum balance ensures that the bank is able to use the money in its other investments, which is why you are rewarded with higher tier perks. Dropping below the minimum balance means that you haven't kept up your end of the bargain, so to speak. For example, the Way2Save savings account has a small monthly fee which is waived as long as you maintain a $300 minimum daily balance, or have automatic transfers, are under 24 years old, etc. The "Platinum" savings account tier has a $12 monthly fee which is waived only if you maintain $3,500. It is of course worth noting that the "perks" of these savings accounts are practically worthless- the earnings interest rates are far below inflation.
csomar 4y ago
To be fair, this is common among most of the big banks in the US. In my opinion, they do not cater for poor people and only make sense if you make $50k+ in transactions with them per year. Case in point: I have a WellsFargo account. It was mostly dormant for 4-5 years with enough cash to avoid the penalty fee. In the last year, I used it for most of transactions (doing $10k+/month at some points). I got my credit card limit upgraded in a short amount of time (by around $5k). I was out of the US, and needed a new credit card. WellsFargo contacted me (got back to me) shipped a new card overnight overseas for free and waived the fees for the credit card and gave some credit/gift things. I mean completely different experience?
- EdwardDiego 4y ago
  What kind of account was it that was dormant, was it a regular checking account?

They would have "agreed" to it in the fine print of a 20 page ToS that they didn't have the time or legal skills to read. Then crony capitalist corruption makes it so that lawmakers don't outlaw it.

zdragnar 4y ago

Different types of accounts offer different types of incentives. Your standard free checking account won't have a minimum balance, but also isn't going to be earning any interest worth mentioning. On the other hand, there are account types with higher interest earnings rates or other perks which require that you maintain a minimum balance. The minimum balance ensures that the bank is able to use the money in its other investments, which is why you are rewarded with higher tier perks. Dropping below the minimum balance means that you haven't kept up your end of the bargain, so to speak. For example, the Way2Save savings account has a small monthly fee which is waived as long as you maintain a $300 minimum daily balance, or have automatic transfers, are under 24 years old, etc. The "Platinum" savings account tier has a $12 monthly fee which is waived only if you maintain $3,500. It is of course worth noting that the "perks" of these savings accounts are practically worthless- the earnings interest rates are far below inflation.

csomar 4y ago

To be fair, this is common among most of the big banks in the US. In my opinion, they do not cater for poor people and only make sense if you make $50k+ in transactions with them per year. Case in point: I have a WellsFargo account. It was mostly dormant for 4-5 years with enough cash to avoid the penalty fee. In the last year, I used it for most of transactions (doing $10k+/month at some points). I got my credit card limit upgraded in a short amount of time (by around $5k). I was out of the US, and needed a new credit card. WellsFargo contacted me (got back to me) shipped a new card overnight overseas for free and waived the fees for the credit card and gave some credit/gift things. I mean completely different experience?

EdwardDiego 4y ago
What kind of account was it that was dormant, was it a regular checking account?