5 ways of how bank make money

Banks as a Finacial Institution: Irrespective of the catchy headlines and the taglines, banks are never on the consumer side. They are into business and often look out for ways to increase the profit, which they do so by carrying out or legally implementing different actions and collect fees from the customers. It is one of the primary aspects of banks, and thus, made it one among the top five profitable businesses in the world.


Learn about the five different ways through which banks are ripping their customers while they are legitimately making money.

  • Asking you to buy financial products

The call center executives belonging to a bank often give you a call to sell several financial products. It is common for them to be pushy. However, at different times, to complete their goal and given tasks they sell projects to customers who do not possess the necessary qualification for the benefits or the offer.

  • Increasing the fees without notice

As customers, we expect our banks to offer exceptional service for the fees they charge from us. Banks tend to increase the fees sighting the role of inflation. Although a little inflation is good for the economy, banks do not have any particular regulations when it comes to increasing the prices of the services. For instance, the ATM surcharge jumped by 40%, the account management fee saw a hike by 142%, and overdraft saw an increase of 11%.

  • Targeting people with low credit score

People with low credit score are bound to possess less money in hand to deal with an emergency. Due to this, they tend to incur late and penalty fees. They mistakenly buy financial products that are not worth from the financial point of view. As banks know the theory, they target this specific group of people. The Consumer Financial Protection Bureau (CFPB) fined Capital One in the year 2012 for $25 million, as it targeted people with lower credit limits and offered sub-prime cards. Apart from this, the operators of the company spoke to the customers that payment and monitoring of the credit card are mandatory.

  • Not reporting to credit bureaus

Although banks do not have to provide information related to the account operation of the customers to the credit bureaus, they do have to inform about customer disputes. It is further essential for banks to send information to the bureaus related to payments when customers promise to make the same. However, such actions do not happen regularly.

  • Not paying the rewards

An advantage that customers receive using credit cards is they obtain free money by using them often. All the banks promise reward points upon signing up with a new credit card. A few cards come along with cashback offer. However, many banks tend to skip the same sighting several reasons. The CFPB in 2012 ordered American Express to honor the promise of adding $300 to all the customers who signed up for the Blue Sky credit card.


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